Schedule your appointment 619.255.9554
Everything You Need to Know About RMD’s

Everything You Need to Know About RMD’s

As Ben Franklin said, “… [n]othing is certain but death and taxes.” Required Minimum Distributions (RMDs) are the method the IRS uses to ensure that you pay some taxes on your pretax retirement savings. They’re pretty straightforward, but there is a catch here and there.


What accounts are subject to RMDs?

To paraphrase George Carlin, Uncle Sam loves you and he needs money! Required withdrawals are generally only taken from retirement accounts that have pretax funds in them, with one exception. Because you haven’t yet paid any taxes on that money, you need to start taking money out to provide the government with some income tax revenue.

Traditional IRA, SEP and SIMPLE IRAs, and 401(k)-like accounts, such as TSP and 403(b)s, are subject to required minimum withdrawals. However, if you reach RMD age while you’re still working at the company whose 401(k) you currently contribute to, you don’t need to start taking them as long as you own less than 5% of the company. If you have 401(k)s from previous companies, however, you’ll need to take RMDs from them.

Since you paid taxes on your Roth contributions, you won’t have to take any money out of your Roth IRA. That’s for both contributions and conversions, because either way you already paid your taxes. Roth conversions often make sense in certain years with lower tax brackets, and to “fill up” your tax bracket. You get the added benefit of reducing the size of your Traditional account and thereby reducing required income in addition to accumulating more tax-free money.

The one exception for Roth accounts is for 401(k)s and similar employer retirement accounts (though not SEPs and SIMPLEs). Roth 401(k)s are subject to the same rules as the Traditional 401(k). Even though it’s after-tax money, RMDs are still the rule. Unless you’re still working for the company whose 401(k) you’ve been contributing to, in which case you don’t have to begin at age 72.

It’s easy to avoid this particular complication. Just roll your Roth 401(k) money into a Roth IRA instead. A direct rollover has no tax consequences, and you’ll eliminate the RMD from that account.


How much am I required to take out?

Fortunately, you’re not the one who has to calculate the amount! The financial institution that holds your retirement account will tell you how much you need to withdraw. If you have multiple accounts, the institution calculates the amount for each account.

The requirement is based on the account balance as of the previous December 31 and your life expectancy factor taken from IRS tables. The beginning requirement is usually around 4% of the balance, and the percentage increases as you age.


Which accounts can I use to satisfy the RMD requirement?

The money must come from a pretax retirement account in your name. The IRS doesn’t keep track of the individual amount that you owe, just the aggregate amount.

For example, suppose you have three IRAs at different brokerage firms. The RMDs are $2,000 on one, $3500 on another, and $1500 on the third so the total withdrawal is $7,000. You can take the entire amount from one account or split it up between them all, whichever makes sense for your financial plan.

We recommend consolidating accounts, especially retirement accounts. Fewer accounts makes keeping track of your RMDs much easier. If you miss a withdrawal, the penalty is pretty steep.


When do I have to start my RMD’s?

For many years, the starting age was 70 ½. That was changed during the last administration to age 72, and RMDs were waived for the 2020 tax year in the CARES Act, due to the coronavirus.

If you are age 72 or older you need to start your distributions (subject to the caveats noted in question 1). For the first year of RMDs, you can delay your distribution until April 1 of the following year. For every other year, you’ll need to make the withdrawal by December 31 of that year.

It’s usually not a good idea to delay your first withdrawal. If you don’t take it in the year you turn 72, then you’ll have two required withdrawals the next year: the one you were supposed to take at age 72 plus your RMD for age 73. The option is available to you in case there is some reason that it makes sense.


Is there any way I can avoid RMDs?

There’s no legitimate way to avoid the required withdrawals once you’re age 72 and no longer working for the company you were contributing to. However, you can avoid paying taxes on up to $100,000 of your RMD by using the Qualified Charitable Deduction or QCD.

Sending a withdrawal from your retirement account directly to the qualified charity of your choice satisfies your distribution requirement, but you don’t owe taxes since it’s a charitable donation.

The QCD strategy only works if the money comes from an IRA, because it doesn’t count from an employer retirement plan. In addition, the funds must leave the IRA institution and be sent immediately to the charity (a nonstop transfer). Any donation that makes a stop at your bank account loses QCD eligibility.


What if I don’t take my RMDs for the year?

The IRS levies a pretty hefty penalty of 50% of the RMD if you elect not to take it out, or on the portion that you didn’t withdraw if you did take some out.

Unless you can prove that you didn’t know you had to take it and you never received the notification from your financial institution, you’ll owe that penalty.


What happens if I die in the year I start my RMDs?

Your beneficiaries are required to take the required withdrawals by the end of the year (December 31), even if it’s the year you turned 72. Each of the beneficiaries has to take their proportional share, no matter if another beneficiary takes more than their share.

For example, suppose your RMD is $1,200 and you have four beneficiaries. Each one must take $300 before December 31, even if another beneficiary already took out the full $1200.

If your beneficiary is a trust or the estate, the trust (or estate) must make the withdrawal before December 31.

If you have questions about consolidating your accounts or potentially reducing your RMD exposure, please give us a call at 619.255.9554 or send us an email to set up an appointment.



Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Financial Independence for Women

Financial Independence for Women

Your road map to financial security.


Women face many unique challenges when it comes to personal finance and investing.

  • Physical and emotional – longevity, more subject to elder abuse, more likely to struggle after divorce or death of partner.
  • Workplace – lower salary over fewer earning years, out of workforce caring for family.
  • Behavioral – less confident about investing skills, more likely to start investing later, invest in less risky assets, less likely to participate in workplace retirement plans.

What does freedom mean to you – starting your own business, going part-time or leaving the workforce, moving abroad, leaving a relationship or job that isn’t right for you, living without debt hanging over your head?


Make your future self happy.

In his TED Talk, Daniel Goldstein tells us that our present self doesn’t want to save but wants to consume and have fun but our future self wants our present self to save. Present self is the one that’s in charge, so how do we convince our present self to pay attention to our investment accounts?

Click here to view on YouTube >>

Draw a persuasive picture.


  • Imagine yourself in the future.
  • Anticipate your emotional reaction when future self is able to retire without stress.
  • Visualize reaching your goals.
  • Positive reinforcement about good things your past self has done.
  • Remove obstacles such as inertia.
  • Put decisions on automatic pilot

Where do you want to be?


  • When do you want to retire?
  • What does retirement look like to you?
  • How much will that retirement cost?
  • Do you have flexibility?
  • Do you have short-term goals that also need to be funded?
  • What is your time horizon?
  • Do you know how much your Social Security Benefit will be?
  • How much do you need to save?
  • How will you bridge the gap?


Debt Best Practices

Pay on time every time! Call your credit card company and request a rate decrease. Transfer high rate balances and consoldate into a low interest loan. Clean up your credit report. Review your credit activity yearly.



4% Rule

You can withdraw 4% each year from a  balanced portfolio (60% stocks 40% bonds) over a 30-year retirement period with a high probability of success of not running out of money.

1M portfolio x .04 = $40,000 per year.


Reading List

Lean In by Sheryl Sandberg

Don’t Ask by Linda Babcock and Sara Laschever

The Marshmallow Experiment

4% Rule by Bill Bengen


Action Plan

Now is the time to review your accounts, to check for diversification, and to make sure your asset allocation matches your risk tolerance.

So, what is the right portfolio for you?

The asset allocation decision is driven by your risk tolerance.  Risk tolerance is actually a two-prong test.  It encompasses your willingness to take risk and your ability to take risk, which are sometimes at odds with one another.  Willingness is determined by how much portfolio volatility you are comfortable with, which is a subjective choice.   The ability to take risk is an objective determination based on a number of factors including, but not limited to, your goals, your cash flow needs, and tax considerations.   

    Would you like to know your risk tolerance score?


    We invite you to complete our online risk tolerance questionnaire. You will receive a personalized and comprehensive risk report. Once you have an idea of your risk number, you can give us a call and we will be happy to review the results and look over your investments to make sure your allocations are aligned with your risk profile


    Risk Tolerance Questionnaire

    Find out your personal risk capacity and risk tolerance.


    After reading through the information, you might still have questions. Call us.

    Social Security

    Get started with your account and access to your benefits information.

    Would you like to receive more tools, resources and education? 

    Sign Up

    In a couple of weeks we will have a secure portal for you to sign in and view the full Women’s Alliance Round Table presentation, along with questions and answers from coworkers, tools and downloads for your continued financial journey.

    Would you like to receive our informative Newsletter?

    15 + 6 =

    Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

    Dream. Plan. Do.

    Smart Credit for Smart People

    Smart Credit for Smart People

    In the consumer economy, credit is pretty easy to obtain. That often leads to problems for those who don’t know how to use it wisely. At the other end of the spectrum, some people avoid using credit altogether. Smart people use smart credit strategies to maximize their financial position.

    Credit provides leverage to help consumers build assets and wealth. In honor of March being National Credit Month, here’s the lowdown.

    Why do most Americans need credit?

    Now that credit scores are national, standardized, and organized by the three credit-reporting bureaus, it’s become a popular measuring tool. Before 1989, credit scores were localized affairs and used mainly for just obtaining loans or credit cards. 

    Today that’s no longer the case because credit scores aren’t just for lenders anymore. It’s essential to monitor your score since there can be a lot riding on it. In today’s world, it’s necessary to have one in the first place. 

    Americans who don’t have at least one credit card will likely find themselves disadvantaged in various financial situations. Not only when it comes to arranging for a mortgage to buy their house but also in finding a job and renting an apartment. 

    Landlords and employers often request a check on the applicant’s credit history. Some consider the lack of a credit score even worse than a bad one. Good landlords may not rent to someone with no credit at all.

    Most Americans must build a retirement nest egg through contributions to a retirement plan. Still, a significant source of household wealth remains the family home. Buying a house for cash is beyond most people’s means, so financing through a mortgage is critical. A history of good credit means a much lower interest rate added to the principal cost than a higher rate for someone with poor or no credit at all.

    That’s why young adults need a credit card and learn to use it responsibly by paying off the balance every month to avoid interest charges. That’s the best way to start a history of good credit, as well as avoiding the pitfalls of having too much revolving debt.

    Maximizing the use of credit cards

    As long as you pay off the card balance each month, the amount due doesn’t continuously increase with interest payments. Using credit cards can help consumers build wealth. 

    In addition to making money, wealth depends on not losing money or giving up too many gains. If someone gains unauthorized access to your card, it’s easier to dispute a transaction compared to a debit card.

    Make money with your credit by finding cards that provide rewards that match your lifestyle. If you do a lot of traveling (and will resume after the coronavirus pandemic), then a card that offers travel rewards makes a lot of sense as long as the annual fee doesn’t wipe out the reward. 

    When you have good credit, it’s easy to find a credit card with low or no fees that give you rewards on your purchases. Cashback is a great reward, but many cards these days offer points instead. You can still benefit from the points rewards because you can exchange points for various merchandise and gift cards. Now you’ve got presents for birthdays and holidays covered.

    Smart credit as leverage

    While credit cards are one example of credit, they don’t provide you with any leverage because you pay the balance every month. Using different credit types to buy assets gives you the ability to invest more without paying the entire amount upfront.

    What kinds of assets does credit help you leverage? Technically vehicles are listed as assets on the balance sheet, but they depreciate quickly. Taking out a loan to buy a car doesn’t provide you with an asset. 

    However, taking out a loan (mortgage) to buy a property or taking out a loan (student loans) to increase your human capital will help you accumulate wealth when used correctly. 

    Being smart about leverage allows you to invest in something that you can’t afford to pay for entirely right now but will be able to in the future (given some reasonable assumptions). Using leverage to buy an asset (or capital) that you won’t be able to maintain in the future sets you up for potential disaster. Keeping it reasonable helps ensure the loan amount won’t wreck your finances down the line.

    Using credit for smart timing

    For example, initially, interest-only (IO) mortgages were used for people who logically expected enough income in the near future that would then allow them to pay down the principal. A typical example (at least here in California) is a Hollywood director who could expect millions from one film released after nine months. The IO loan helped them buy a decent house now rather than wait a year for the money to come in. 

    These loans weren’t intended to finance too much house for people who didn’t expect they’d be able to afford the payments. Of course, IO loans aren’t the only ones that can be misused. You’ve probably heard of the phenomenon known as being “house-poor,” where the housing and associated payments eat up most of the homeowner’s income. 

    Sometimes that’s due to something unexpected like job loss. But sometimes, it’s due to a mortgage that’s larger than the homeowner can reasonably expect to carry for 15 or 30 years. While layoffs and recessions aren’t predictable, the amount of income you need to sustain a mortgage and associated housing payments is. 

    Using smart credit for better returns

    Home equity loans make sense when you’re making improvements to the home that will increase its value. They make less sense when you’re taking the money out to buy something. 

    Similarly, refinancing a mortgage is a great idea when either rates have dropped or your credit has improved to the point where you can substantially save on payments. It’s a bad one when you’re trying to take money out for a purchase because you don’t have any other cash available. Especially an investment that doesn’t result in ownership of an asset.

    If you’re building a business that’s likely to grow and prosper, taking out a business loan to get through those first lean years is an excellent use of leverage. It works with investment real estate, too. Many lenders will allow you to use the property’s expected rental income to increase the loan principal. 

    Making sure that the amount is within reason applies to student loans as well. Taking out a 6-figure loan to pay for school may make sense when you’re entering a field, like medicine, where you’ll be richly rewarded with hundreds of thousands of dollars a year. But it’s way too much for a job where the average income is only in the five figures annually.

    Using credit wisely and as leverage to accumulate capital and build assets is an integral part of a smart financial plan. Debt isn’t necessarily a bad thing, as long as you manage your credit exposure and avoid incurring unnecessary interest charges.

    Good credit is necessary for the modern world, so having at least one credit card paid off monthly is helpful for many financial decisions.

    Are you thinking about refinancing a mortgage or investing in property? Feel free to give us a call at 619.255.9554 or send us an email to set up an appointment.


    Are you on track for retirement?

    Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

    Dream. Plan. Do.

    Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

    Financial Planning and Investing for Women

    Financial Planning and Investing for Women

    We’ve put together some ideas for women to get comfortable talking about financial planning and investing.

    Women face many unique challenges when it comes to personal finance and investing. One big challenge is that money is a taboo topic for women. By one estimate, 90% of women will be solely in charge of their money at one point in their lives. It can be hard to take control of your financial situation if you don’t feel comfortable talking about it.

    According to research by Fidelity, 80% of women investors refrained from talking about money with people close to them, citing reasons like it’s too personal or uncomfortable, or not wanting people close to them to have that knowledge. Only 47% of women said they would be comfortable talking about money with a financial professional.

    These statistics are seemingly at odds with results from the same study that showed a huge majority of women would like to become more engaged with financial planning and learning more about money and investing.

    With these statistics in mind, we put together a quick list of ideas to help you start talking about your money, finances, and investments.


    Find your tribe of women investors.

    Find a community of people that you trust to discuss financial issues. If you have specific goals (like saving more or getting out of debt), surrounding yourself with like-minded people can give you support and encouragement. A group of women can help you feel comfortable enough to ask questions and learn from each other.

    Learn more about financial planning for women.

    Commit time to learning more about personal finance, investing and financial planning. There are many books and online resources dedicated to helping people learn.  Start with our video series on Financial Fundamentals.


    Ask your financial advisor questions.

    Don’t be afraid to ask questions if something is confusing or if there are terms you aren’t familiar with. A good financial advisor knows that it is important that you understand your finances and investments for you own security and peace of mind. 

    Be compassionate to yourself when relearning how to talk about money.

    Understand that most people feel some discomfort talking about money, not just women. Personal finance reveals how you spend your money and what is important to you in your life. Talking about it is deeply personal and emotional. You might have to take a hard look at your upbringing and social or cultural teachings about money. If you were taught that it isn’t polite to talk about money or if finances were a source of stress in your family, you may have to relearn some of the beliefs that you were raised with. This can be difficult, so be kind to yourself as you go through this process. 

    Find a financial advisor who understands women investors and their unique concerns.


    Find a financial profession that wants to understand your situation and your concerns, answer your questions in a non-judgmental way, and explains your options with the pros and cons of each course of action.

    Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary meeting. 619-255-9554.


    Dream. Plan. Do.

    Estate Exemption Expiration

    Estate Exemption Expiration

    Today, it’s hard to believe that in 1997 you could only exempt $600,000 from estate taxes. When a person died, heirs would pay tax on anything above $600,000 at the (then) maximum 55% tax rate. The estate situation is very different today. The Internal Revenue Service just announced that for anyone dying in 2021, the inflation-indexed exemption would be $11,700,000 per person. Any unused amount from the first spouse to die can be used later by the surviving spouse. Also, the maximum estate tax on amounts above that threshold has dropped to a 40% rate.


    The Tax Policy Center estimates that only about 0.1% of the estimated 2.7 million people expected to die in the coming year will have to pay any estate taxes at all. There has never been a year when the government has reduced the estate tax exemption in the history of estate taxes.



    Changes to the estate exemption


    All of that could end in four years unless Congress passes an extension. The current exemption sunsets at the end of 2025, at which point the exemption would automatically drop back to what it was before 2018—back to $5 million indexed to inflation. We may not have to wait that long. President-elect Joe Biden’s tax plan calls for reducing the estate tax exemption amount to $3.5 million. The plan would also increase the top rate for the estate tax to 45%.



    How the Biden plan would change the estate exemption


    The Biden plan would dramatically reduce the exemption. This change would pull a lot more people into estate tax territory. It is uncertain the measure would pass in its current form, and it seems unlikely that it would affect the 2021 tax year. But the prospect of a change has set people talking to their financial advisors about gifting to heirs under today’s very generous exemption, under the (reasonable) assumption that there would be no walk-back for any actions taken under current tax law. Besides, families can put several relatively complicated estate tax strategies into place, which allow them to keep control of their assets if needed in retirement. At the same time, heirs receive increases in value tax-free. Tax experts are quietly telling their clients to plan now rather than later.



    Planning for the estate exemption or possible changes



    Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route.


    Discover. Where are you and where do you want to be?

    During our meeting, we discuss your goals and concerns before we start gathering data. The financial facts and figures are important, but it’s not the whole story. We learn about your values and dreams, as well as what keeps you up at night, so that we can serve you better.


    Create. How can you get to where you want to be?

    We develop a customized financial plan that shows where you are in relation to where you want to be. We present different scenarios that show the impact of your options so you can choose how to accomplish your goals in a way that is meaningful to you and how you want to live your life. We also stress test the scenarios to see how your plan will hold up to challenges like lower returns or higher inflation.


    Execution. What are you willing to do to get there?

    A plan has no value if it’s not implemented. You choose the scenarios and options that are right for you, and we act as your accountability partner to ensure the plan is implemented. We break the actions into manageable steps and help you prioritize so you’re not overwhelmed.  We also work with your attorneys, accountants, and other professionals as needed.


    Monitor. What happens when life happens to your plan?

    We stay engaged with you because life happens, both good and bad. Fluctuating markets, career changes, liquidity events, changes in the laws, and health concerns can impact your plans. Ongoing proactive planning can keep you on track toward your


    If you’d like to see some financial plan scenarios for your retirement or estate planning, please give us a call at 619-255-9554.

    We would love to explore your possibilities with you.

    Long-Term Care: What You Need to Know

    Long-Term Care: What You Need to Know

    There are many misconceptions and misunderstandings about long-term care (LTC), including who needs it and how to pay for it. It’s essential to break down the main components of long-term care insurance to find what is right for you.


    What does long-term care mean?

    If you’re already on Medicare or researching it, you know that Part A covers in-patient hospitalizations and skilled nursing. You might be wondering why people buy policies to cover LTC if Medicare already pays for it.

    But Medicare does not pay for LTC, which is not skilled nursing. It’s home help for someone who can’t perform several of the Activities of Daily Living (ADLs) for themselves: toileting, transferring (for example, from bed to chair), dressing, bathing, feeding, and walking or ambulating. You might also see these referred to as the Basic Activities of Daily Living or BADLs.

    Patients can receive LTC in a facility such as a nursing home or their own homes.


    Why should I consider setting aside funds to cover long-term care?

    According to the US Department of Health and Human Services, if you’re approximately retirement age now, you have a 70% chance of needing some LTC. About 1 in 5 of those who will end up receiving long-term care will need it for more than five years.

    Depending on how long you need it, the expenses quickly add up. LTC’s costs range from $3,600 per month for someone who is mostly independent in a facility to about $7,700 in a nursing home. 

    Home health care aides cost approximately $21 per hour on average. The average American who needs this help during the day would spend roughly $5,000 a month. Whether in a facility or at home, typically, women need care for a more extended period than men do.

    It costs a little bit more than average here in California to receive LTC in a facility. The median cost for help with assisted living is about $4,500 and goes up to over $10,600 in a nursing home.

    Some families are willing to self-insure or pay out of pocket should they ever need this kind of assistance. Family members can also provide care, which reduces the cost as well.

    However, some people would prefer to be independent for as long as possible. They’d rather hire someone outside the family to help them go to the bathroom or get dressed.

    Those who choose to hire for this type of care often want to set aside funds for this purpose. They don’t want to be a burden on their loved ones. 


    Long-term care insurance (LTCI)

    These policies pay a certain amount for a specified period if a doctor diagnoses the insured as unable to perform two or three ADLs, depending on the policy. 

    Unlike life insurance, there is no medical exam for LTCI. However, the companies use questionnaires, and you may respond with answers that disqualify you. For example, they will typically reject people who are already showing symptoms of cognitive issues such as Alzheimer’s and dementia.

    Although LTCI has been around here in the US since the 1970s, Americans started to purchase them in the 1980s. The insurers at that time made two significant errors in their pricing.

    They didn’t know how fast the cost of health care would accelerate (faster than CPI inflation) and didn’t realize how much longer people would live. These factors led to substantial underpricing on the policies, and in some cases, the insurers even refused to pay for legitimate claims.

    As a result, fewer insurance companies are in the market for LTCI today. However, policies still are being sold.

    The contracts usually stipulate limits on lifetime benefits paid out, the monthly maximum, and potentially a deductible. They also offer inflation riders for additional fees. Most policies today don’t discriminate between facility or in-home care. 


    Ways to purchase LTCI

    The original policies were usually use-it-or-lose-it. If you paid for the policy and never required the care, you couldn’t get a refund. Though so much of the population is likely to need it these days, it might not be such an issue for potential buyers. 

    Anecdotally the “sweet spot” for purchasing such a policy was around 55 years old. You wouldn’t have too many years of payments if it turned out you didn’t need it, and you were still young enough that some of the disqualifying medical conditions probably hadn’t appeared.

    These contracts are still available, though their popularity has dropped sharply. Premiums can undergo rate hikes at any time in the future. 

    The insurance company can’t increase the amount you pay just on your policy, but it can raise the premiums on the entire class of people who purchased the same insurance as you. They now have other premium payment options, so you don’t continue to pay for life. 

    Rather than take a use-it-or-lose-it policy with the potential for future premium hikes, some LTCI users purchase a hybrid product. These can be life insurance or annuity products that also allow you to use the money for long-term care.

    In the hybrid with life insurance contracts, typically, the cost of whatever care you use is deducted from the face amount that’s payable at death. Different companies offer different ways to structure the policy.

    When you combine LTCI with an annuity, you usually need to purchase the annuity with a lump sum. There are no premiums for the LTCI, and what you’ll receive is based on how your insurer sets up your contract.

    Although the hybrid products are often more expensive than a plain-vanilla life insurance or annuity policy, they can be a good alternative. Especially for someone who suspects they may need the care but is not interested in a stand-alone policy they might not use.

    No matter what type of long-term care insurance you buy, make sure that you understand what triggers a claim and what the policy promises to pay. 

    If you’re considering LTCI, make sure you check with your company, associations, and groups. Some offer group LTCI plans with relatively attractive premiums.


    If you want help determining whether you need to buy some LTCI, give us a call at 619.255.9554 or email us to set up an appointment.



    [ultimatemember form_id=”1899″]