The Long-Term Care Tax Strategy Every High-Income Earner Needs

As Americans live longer, long-term care (LTC) planning has become a critical part of wealth management. According to The New York Times, 82% of adults are likely to need LTC, and costs continue to rise—up to 10% higher in 2024 alone.

Many assume Medicare will cover these expenses, but it only covers limited care—typically up to 100 days. That leaves high-income earners asking: How can I fund future care without draining assets or increasing taxes?

The Hidden Risks of Self-Funding Care

Self-funding LTC can create major tax inefficiencies and financial risks:

• Large withdrawals can push you into higher tax brackets

• Market volatility can erode portfolio value

• Higher income may trigger Medicare IRMAA surcharges

What Is IRMAA — and Why It Matters

IRMAA (Income-Related Monthly Adjustment Amount) is an added Medicare cost for individuals earning over $106,000 (or $212,000 jointly). It’s based on income from two years prior and can raise monthly premiums by hundreds of dollars—without warning.

A Smarter Approach: Tax-Free Long-Term Care Benefits

Instead of using taxable assets, high-net-worth clients can leverage hybrid life insurance with long-term care benefits—such as Securian’s SecureCare™ III.

This approach can:

✅ Provide tax-free funds for qualified LTC expenses

✅ Reduce taxable income and IRMAA surcharges

✅ Protect investment portfolios and preserve wealth

In one case study, a client paying for care with taxable assets faced $30,000 in added taxes and IRMAA costs, while a tax-free LTC strategy saved over $21,000 annually.

Protect Your Wealth and Legacy

For affluent clients, long-term care is not just a health concern—it’s a tax and estate planning opportunity. Strategic LTC planning can help you:

• Lower your lifetime tax burden

• Safeguard assets from unexpected care costs

• Maintain control and independence in retirement

Let’s Build Your Tax-Smart LTC Plan

At SmartMoneyFin, we help high-income professionals create tax-efficient strategies for retirement, healthcare, and legacy protection.

👉 Schedule your consultation today to explore how an LTC tax plan can help you protect your wealth and peace of mind.