What federal employees need to know about long-term care expenses.
In a recent survey that was completed in November 2023, KFF explored what individuals thought about Long-Term Care (LTC), how individuals will pay for LTC if needed in the future, and whether these individuals have taken any steps to prepare for any LTC needs.
The need for LTC services is growing rapidly. Millions of older adults in the US and younger people with disabilities require assistance with activities of daily living (ADLs). These people may need the services provided in residential facilities, such as nursing homes and assisted living facilities, or in their homes with LTC services being provided by paid or unpaid caregivers. However, the KFF survey, conducted in 2022, found that most adults do not feel prepared to manage the costs of LTC.There are some alternatives for federal employees and retirees who have not purchased LTC insurance, namely “self-insurance.” “Self-insurance” means setting aside funds to be used to pay future LTC expenses, should they happen. For federal employees, “mentally setting aside” a portion of the TSP accounts to be used to pay for possible LTC expenses is an example of “self-insuring.” The same can be said about setting funds up in an IRA. Roth TSP and Roth IRAs. Roth accounts are particularly attractive and recommended because withdrawals from these accounts are tax-free.
The advantage of “self-insuring” for potential future LTC expenses is obvious. In case LTC is not needed, or if an individual dies before ever needing LTC, then any funds set aside should be inherited by a named beneficiary. The same cannot be said when an LTC insurance policyholder dies. Upon the death of the LTC insurance policyholder, all LTC insurance premiums paid by the deceased policyholder will be kept by the insurance company.
The challenges associated with LTC affect many federal employees and retirees. The challenges are growing and will continue to grow in the future, especially with employees who are in mid-career. Many of these employees are addressing their future LTC and are currently dealing with parents and/or parents-in-law LTC needs..
Federal employees and retirees who are interested in learning more about LTC including the Federal Long Term Care Insurance Program are invited to attend a 3-hour webinar entitled “Long Term Care” presented by Serving Those Who Serve”. The webinar presents the options for paying for LTC and an overview of how LTC insurance works. here is no fee to attend the webinar. To attend, please register by clicking here. The webinar will be held on February 21,2024 (11:00 am to 2:00 pm) and again on May 23,2024 (1:00 pm to 4:00pm).
“Had to rely on family for food and help with bills some months. Terrible times.” A 36-year-old man from California whose loved one resided in a LTC facility.
“Had to take a leave of absence from my employer to care for my 85-year-old mother.” A 63-year-pld woman from Mississippi who provided care for a loved one.Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street – Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
The FedLife Podcast is your in-depth, biweekly deep dive into the world of federal benefits and retirement planning. Hosted by federal benefits expert Ed Zurndorfer and Dan Sipe of Serving Those Who Serve, each 30-minute episode unpacks the complexities of FERS and CSRS retirement, FEHB and Medicare, survivor benefits, tax planning, and more. Designed for federal employees and retirees who want more than just the basics, FedLife goes beyond the headlines to explore the rules, nuances, and strategies that can make a meaningful difference in your retirement. Remember: it’s your Fed life, make it a great one.
The Fed15 Podcast is your weekly 15(ish)-minute briefing on federal benefits and financial planning, built specifically for federal employees and retirees. Hosted by Dan Sipe and Katelyn Murray of Serving Those Who Serve, each episode delivers clear, actionable guidance on topics like FERS and CSRS retirement, TSP strategies, FEHB, survivor benefits, tax planning, and more! Whether you’re five years from retirement or already there, The Fed15 helps you cut through the noise, avoid costly mistakes, and make confident decisions about your federal benefits.
