IRA/401(k) to Long-Term Care Plans
Turn Retirement Savings Into Tax-Free LTC Coverage — Without Losing Control
Use a Portion of Your Retirement Account to Cover Long-Term Care — Tax-Free.
If you’re 50–80 with funds in a qualified account, you may be able to convert all or a portion of it into a long-term care plan
with tax-free benefits, no ongoing premiums, and no early withdrawal penalties.
What Is an IRA/401(k)-Based LTC Plan?
Most Washington retirees have retirement accounts built for income — not care.
But with the right strategy, your IRA or 401(k) can fund guaranteed, tax-free long-term care.
How it works:
- Your funds are directly transferred into a special LTC-qualified plan and taxes are spread out over 10 years
- Care withdrawals are 100% tax-free under IRS rules
- If you never need care, your money remains in your estate
Why This Works
Multiply Your IRA/401k Value
Uses IRA/401k accounts to fund lifetime care coverage.
Can include joint coverage where you and your spouse share the benefits in the same policy.
Tax-Free Withdrawals for Care
Under Section 7702B of the tax code, you pay zero taxes when using this plan for qualifying LTC.
No Market Risk or
Ongoing Premiums
This isn’t traditional LTC insurance. There are no surprise premiums — and benefits are contractually guaranteed
Leave a Legacy if
You Don’t Use It
If care isn’t needed, your money stays in your estate or passes to your spouse.
Local, Personalized Guidance
You’ll speak directly with John — not a call center. He’s local, licensed, and understands the plans available to you.
Who This Is For
You may be a good candidate if:
- You’re age 59 1/2–85
- You live in Washington State
- You have funds in an IRA, 401(k), or similar account
- You want to reduce taxes, avoid draining savings, and cover care costs without risk
Common Questions (FAQ)
Q: Will I get taxed for moving money from my IRA or 401(k)?
A: Not if structured correctly. We use IRS‑approved strategies to minimize or avoid taxes and penalties — often through a process called IRA Repositioning.
Q: Do I lose access to my retirement funds?
A: No. Your money stays in a vehicle you control — and if care isn’t needed, it remains part of your estate.
Q: Is this better than traditional LTC insurance?
A: It depends. But for many, this approach offers more value, tax efficiency, and flexibility — with no ongoing premiums.
Q: Do I need to go through medical underwriting?
A: Yes. I will walk you through the process to see if you qualify.