NEWS & RESOURCES

Authored by: Adelae Winters, Financial Advisor

Long-Term Care Planning: Preparing for the Future

Long-term care planning is an essential part of financial and health security, ensuring individuals have the resources and support they need as they age or face unexpected health challenges. With the rising costs of care services, proactive planning can help mitigate financial strain for individuals and their families.

Understanding Long-Term Care

Long-term care encompasses a range of services designed to assist individuals with daily activities, such as bathing, dressing, and meal preparation. These services can be provided in various settings, including nursing homes, assisted living facilities, and in-home care. The need for long-term care can arise due to aging, chronic illness, disability, or sudden medical events.

Key Considerations in Long-Term Care Planning

1. Assessing Needs – Individuals should evaluate their potential long-term care needs based on family history, current health status, and lifestyle preferences.
2. Financial Planning – Understanding the costs associated with long-term care and exploring funding options, such as savings, insurance, and government programs, is crucial.
3. Insurance Options – Long-term care insurance can supplement or fully cover the cost of care, reducing the financial burden on families.
4. Legal Preparations – Establishing legal documents, such as power of attorney and medical directives, ensures that personal wishes are honored.
5. Government Programs – Medicaid and other state programs may provide assistance for eligible individuals.

Washington State Long-Term Care Tax: WA Cares Fund

Washington State has implemented the WA Cares Fund, a state-run long-term care program designed to provide financial support for residents who require care services. The program is funded through a mandatory payroll tax of 0.58% on W2 income. Employees who contribute for 10 years without a five-year break become permanently vested, while those who contribute for three of the last six years maintain eligibility.

The WA Cares Fund offers a lifetime benefit of $36,500 so long as you remain a WA resident which can be used for various services, including:

• In-home care
• Assisted living facilities
• Professional caregiving support
• Home safety evaluations
• Meal preparation and medication reminders

Opting Out of WA Cares Fund

As of January 1, 2023, the opt-out provision is no longer available. All workers in WA not previously exempted are subject to this payroll tax with the exception of those who:

• Live outside of Washington
• Are military spouses
• Hold non-immigrant work visas
• Are veterans with a 70% service-connected disability rating

Planning Ahead

While the WA Cares Fund provides a small financial safety net for WA residents, individuals should still explore additional long-term care planning options. Private insurance, savings strategies, and estate planning can supplement state benefits, ensuring comprehensive coverage for future needs. Long-term care planning is a proactive step toward financial security and well-being. By understanding available resources individuals can make informed decisions that protect their financial future.

At Cordell, Neher & Company, PLLC, we understand the importance of financial well-being and are here to guide you through every step of the process. To learn more, visit our website at cnccpa.com or call us at (509) 663-1661. Investment strategies discussed may not be suitable for all investors, please consult with your financial professional.