Personal savings, investments, and other assets
Many individuals use their personal savings, investments, pensions, and other assets
and income sources to fund long term care. Because long term care insurance can be expensive
if you initially purchase at an older age, this may be a viable option only for those with above-average financial resources
even then, if you need specialized or long-lasting care, a large amount of personal savings may not be enough.
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Advantages |
Disadvantages |
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If it turns out that you don't need long term care, your money is still yours to
spend, invest, or leave to your heirs.
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Because you don’t know how much long term care you’ll need or how much it’ll cost,
you might not save enough money to pay for all of it.
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If you set aside enough money for your long term care needs, you can choose where
and how you receive care.
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There may be rules about when and how you can use your investments if they are in a tax-favored account. In some cases,
you may have to pay a penalty for withdrawing money prior to a certain age.
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You don't have to worry about qualifying for a long term care insurance policy from a health perspective.
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If you need extensive long term care, you might run out of money and will not be able to qualify for other options.
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