70%
Will need care
Nearly 7 in 10 people reaching age 65 will need some form of long-term care before they die. This is not a tail risk — it is the expected experience.
U.S. Dept. of Health & Human Services
$111K+
Per year, nursing home
2024 national median cost of a semi-private nursing home room — up 7% in a single year. Costs have risen every single year without exception.
Genworth/CareScout Cost of Care Survey, 2024
21%
Average wealth decline
A couple who experiences a long-term care event sees their wealth decline by an average of 21% over nine years — even among those who can afford to pay.
Morningstar
$2,000
Medicaid threshold
Medicaid — the government backstop — only steps in after your savings are spent down to $2,000. It is not a plan. It is a last resort.
Medicaid.gov
When people of significant means hear these numbers, the instinct is usually the same: I have enough. I can handle it. And they're probably right — a long-term care event likely won't bankrupt them.
But here's what the math actually shows. When care costs are funded from a traditional IRA or 401(k), every dollar withdrawn must first survive the IRS. To net $100,000 for care, you may need to withdraw $140,000–$150,000 at your marginal tax rate. Multiply that across a multi-year care event, and you've permanently eliminated the compounding that capital would have generated for decades. You don't go broke — but the financial architecture you spent a lifetime building takes a hit it never fully recovers from.
For decades, the rational response was to decline long-term care coverage. The old standalone LTC policy came with a legitimate problem: if you stayed healthy and never needed care, the premiums were gone forever. Use it or lose it. That objection kept millions of smart, well-insured people unprotected.
That objection no longer exists.
$36.5K
Washington State's mandatory LTC tax — and why it's still not enough
Washington became the first state to pass a mandatory long-term care payroll tax because its Medicaid system was buckling under the weight of uninsured care costs. The resulting lifetime benefit: $36,500. At current nursing home rates, that covers roughly three months of care. Even government-mandated solutions acknowledge the crisis — and fall dramatically short.
Medicaid only steps in after savings are spent down to $2,000. That threshold disqualifies nearly everyone reading this page.
The Modern Solution
The protection layer built into the IncomeArc™ system uses a Living Benefits IUL — a structure that works in both directions. If care is needed, the death benefit accelerates and delivers tax-free funds for care, leaving your investment portfolio untouched and your income plan intact.
If care is never needed, the policy builds cash value you can access as tax-free income during your lifetime — a supplement to your retirement income that doesn't touch MAGI or trigger IRMAA surcharges. And at death, the remaining value passes as a tax-free death benefit to your heirs. No premium is ever wasted — because the policy delivers real value regardless of what happens.
And the funding mechanism changes the equation entirely. A portion of the IRA or 401(k) assets you're already holding — dollars carrying a deferred tax liability that were always heading for a tax event — can be repositioned into this structure. You're not spending retirement money. You're converting dollars the government was already going to hit for tax into a dual-purpose asset: care coverage if needed, tax-free wealth if not.
For most affluent clients, the conversation is settled the moment they realize they can access this as tax-free income if they stay healthy. At that point it stops being insurance. It becomes a retirement asset with a care benefit attached.
"People who built real wealth got there by recognizing good decisions when they saw them. This is one of them."
