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General information from a recorded webinar, not legal advice for your situation.
How do you pay for care on your own?
Short answer
Usually with income first, such as Social Security, pensions and investment income. When that is not enough, assets come next. If those assets are in IRAs or other pre-tax accounts, withdrawals trigger income tax, so the mix of assets shapes your planning options.
Key points
- Care can run around $10,000 a month.
- Income rarely covers it alone.
- Taxes on withdrawals matter.
Lauren FinkFounding attorney, Everbright Legacy Law
Read this part of the transcript
So private pay is usually the first source that we start to identify for paying for care. And when we’re looking at private pay, we’re usually looking at what is the monthly income of the person who has moved into a long-term care facility. Usually, we’re looking at fixed income sources, so Social Security benefits, pensions, investment income that the person may have. But as I mentioned, if we are looking at care of around $10,000 per month, most people are not bringing in that much money per month. So then we look to what are the assets that you have, and also what are the taxation of those assets?
Created automatically from the recording. Full transcript on the webinar page.
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