I know LTCI has been discussed many times in this forum. However, our situation has become somewhat unique. My DW and I have had LTCI coverage for the last 10 y that was partly subsidized through her employer (she is a teacher). Budget considerations have forced the termination of that benefit. If we do nothing, our LCTI coverage will be 169K, but there will be no inflation protection and consequently no participation in the state LTCI partnership program. However, we have been given some options to improve the coverage by prepaying the premiums that were originally expected under the program. We could pay 50K in a lump sum this summer for 169K of coverage with 5% inflation protection (and the 169K protection of our assets under the state partnership program); similarly pay 65K for 338 K of protection, or 75K for 507K of protection. There would be no premiums due after the lump sum payment. To pay the lump sum we would need to mostly rely on some combination of a HELOC (we own the house out-right) and pulling some money from a tax deferred account (as a loan that would settled upon my retirement exit next year).
If we chose to not pay into the program we could supplement with insurance from another company. I have quotes for LTCI (3% inflation protection) with another company of 3.3k annual premiums for 162K of LTCI; and 2.2k premiums for108K LTCI.
We are getting close to retirement, and currently have only about 725K in tax-deferred funds for retirement. However, we both have pensions that together with social security (at FRA in 9 yrs) will cover our expenses. The main function of the 401/IRA funds is to supplement the pensions until we reach FRA at 67, house upkeep and emergencies, and travel money. I think issues of impoverishment of a surviving spouse might be somewhat mitigated by the pensions and social security that would probably cover most expenses for the survivor.
I apologize for the long post. I would be grateful for any wisdom you might provide us as we contemplate our options.
If we chose to not pay into the program we could supplement with insurance from another company. I have quotes for LTCI (3% inflation protection) with another company of 3.3k annual premiums for 162K of LTCI; and 2.2k premiums for108K LTCI.
We are getting close to retirement, and currently have only about 725K in tax-deferred funds for retirement. However, we both have pensions that together with social security (at FRA in 9 yrs) will cover our expenses. The main function of the 401/IRA funds is to supplement the pensions until we reach FRA at 67, house upkeep and emergencies, and travel money. I think issues of impoverishment of a surviving spouse might be somewhat mitigated by the pensions and social security that would probably cover most expenses for the survivor.
I apologize for the long post. I would be grateful for any wisdom you might provide us as we contemplate our options.