Making Long-Term Care Insurance More Affordable

The Long-Term Care Affordability Act, introduced in the House of Representatives, would reform the tax code to make long-term care insurance more affordable and accessible and help older adults better prepare for long-term care costs.

  • It would let people withdraw funds from their 401(k), 403(b), and individual retirement accounts to pay for long-term care insurance.
  • Up to $2,500 of a withdrawal used to pay for long-term care insurance would be excluded from income tax annually.
  • Withdrawals also wouldn’t be subject to the 10% early withdrawal penalty tax.

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