Account type for LTC self insurance funds

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Topic Author
Poor Rod
Posts: 92
Joined: Sun Jul 12, 2020 12:48 pm

Account type for LTC self insurance funds

Post by Poor Rod »

I'm 55, wife is 60. Plan on retiring in a little over a year and have decided to skip long term care insurance and self insure instead. Based on family history, there is a good chance one to five years of care will be needed when we are in our mid eighties, so funds set aside for the self insurance have a couple decades to grow.

My question is where exactly to set aside the funds (which are probably going $250K and 100% VTI). I don't have an HSA, but I do have the following available to me 1) my Roth IRA, which I don't need for retirement funds (TSP will be more than adequate); 2) a regular taxable account; and 3) an inheritance held in a trust account (not yet in place, but should be soon). I was planning on just using the trust account, but realize that the tax treatment of trusts may make this a less desirable choice, especially if I need to make tax decisions when I am in my eighties and may not be all there mentally.

Or am I overthinking this, and shouldn't really have a designated pot of money for LTC as long as I have adequate funds across all accounts? My thinking was if I am going to say I am self insured that's only true if I have the funds specifically set aside for it.
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