My husband and I have a question about long-term care. We are both retired and 71. We have one joint account with about $200,000 and four IRAs totaling about $395,000. We were shy of the market a few years back and foolishly transferred our funds into fixed annuities, from which we are now drawing monthly income. We took out a long-term-care policy when we were 65. The total annual premium is $4,450. We are thinking about canceling it because we heard that IRAs are exempt from nursing home care. That would leave our joint account to cover those expenses should we need it. Our only debt is about $5,000, which is mostly interest-free for one year. Can you help us decide what is best for us? — B.J.M., by email
The answer here is up to you. I can’t contribute much because what happens in the future is all a matter of chance. You might be fortunate and live full lives until the day you both die. It happens. You might also be unfortunate and suffer the fate the insurance folks love making us fear. With about $600,000 in financial assets that you may be able to draw about $30,000 a year from, however they are invested, the $4,450 premium is not a major drag on your standard of living. That argues for keeping the policy.
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