According to a February 2021 Barron’s article, there will be 60% more elderly population by 2030. That’s less than a decade away, which means now could be the time to talk about care planning.

If you’re an annuity owner, chances are you’re either part of the 79% that see it as a resource to avoid being a financial burden to your children or part of the 73% that see it as an emergency fund in case of catastrophic illness or nursing home care.

Whichever way you see it, it’s safe to say that your annuity assets are just sitting around, waiting to be used. Much like a “rainy-day” fund.

Why not help give new life to these old contracts? With the Pension Protection Act of 2006, individuals can use proceeds from some annuities potentially tax-free to pay long-term care insurance premiums. This option means you may be holding a product that can bring about triple tax advantages. Simply repositioning certain non-qualified annuities can provide three efficiencies: tax-free transfer, tax deferrals, and tax-free distributions for qualified long-term care (LTC) expenses.

These tax efficiencies, which many people love, can do more with your money or even provide lifetime benefits for LTC (depending on the carrier). And in many cases, if you don’t use it, the remaining annuity value goes to your beneficiary. Think about what this could mean for your financial situation!

It’s time to have a care planning conversation. As your dedicated financial professional, we can help you mitigate the extended care risks and evaluate your portfolio. Reach out to us, and let’s have a conversation.

Adapted from Annuity1

Adapted from FIG Blueprint2

Securities offered through SCF Securities, Inc Member FINRA/SIPC 155 E Shaw Ave. Suite 102, Fresno, CA 93710: (800)955-2517. SCF Securities, Inc and Creative Financial Strategies LLC are independently owned and operated. www.scfsecurities.com. Note: Securities offered through SVF Securities Inc, Investment Advisory Services offered through SCF Investment Advisors, Inc. This document is for educational purposes only and should not be construed as legal or tax advice. One should consult a legal or tax professional regarding their own personal situation. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products offered by an insurance company. They do not refer in any way to securities or investment advisory products Insurance policy applications are vetted through an underwriting process set forth by the issuing insurance company. Some applications may not be accepted based upon adverse underwriting results.  Death benefit payouts are based upon the claims paying ability of the issuing insurance company. The firm providing this document is not affiliated with the Social Security Administration or any other government entity.

1 https://www.annuity.org/annuities/riders/long-term-care/

2 https://www.figmarketing.com/blog/turn-stagnant-assets-into-tax-advantaged-care-planning-solutions/

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