Save on Taxes when Paying for Long Term Care Insurance – the Pension Protection Act of 2006
If you’re already receiving (or will be shortly receiving) a pension, then you probably want to take advantage and pay your LTC insurance premiums in pre-tax dollars. The LTC Insurance Pension Protection Act (Section 845, 2006) stipulates that LTC insurance premiums can be paid pre-tax directly from a pension.
If you are a fireman, police officer, state or federal employee, this tax-saving payment option might be great for you. It means that you can pay for Long Term Care insurance with tax savings, and thus protect your assets from the risk of needing care. Teachers and many other professionals can also take advantage of this strategy to pay for LTC coverage. Simply check at your pensions department to learn more. If you fall in the 26% tax category, the 2006 Act allows you to save 26% of your LTC insurance premiums.
Welfare is Paying 45% of Long Term Care Costs in the Country
It helps to understand that Medicaid is currently paying for 45% of long term care costs in the country. But why is this? Because a lot of Americans still aren’t planning for life’s uncertainties. Rather than buy insurance well in advance, they end up paying the devastating costs of long term care out-of-pocket. Eventually, they run out of money after exhausting their entire savings, and that’s where Medicaid kicks in. Rather than follow this crisis-bound path, you’re better off just using your pensions to pay for Long Term Care insurance tax-free.
Apparently, the LTC Insurance Pension Protection Act is a way in which the government is encouraging action without having to force people to pay for health insurance. They’re trying to convince people to pay for LTC coverage without forcing it down America’s throat like Obamacare did in 2010.
Save on Taxes, Safeguard Your Retirement Savings
It’s clear cut – the Long Term Care Insurance Pension Protection Act helps you save money for safeguarding your retirement future. It’s ideal for teachers, firemen, police officers, and all other professionals who receive a pension. Simply talk to your pension department to see whether they can start paying pre-tax premiums on your behalf. If you’re having a hard time finding the answers, simply get in touch with us and we can hook you up with the right person in pensions to guide you along.
LTC Key is highly familiar with the 2006 Pension Protection Act. We have seen how it’s been helped our clients pay for Long Term Care insurance pre-tax. You too can take advantage of this opportunity!