Can I Use IRA Money to Buy a Long-Term Care Insurance Policy?
You’ve spent years putting money into your IRA, planning for the day it would help pay for retirement.
But have you thought about what happens if some of that money needs to pay for care?
Perhaps you’ve watched a parent need help at home. Or you and your spouse have talked about protecting each other financially if one of you needs ongoing assistance. You may have wondered whether the money you’ve already saved could help you prepare.
Yes, you can use money withdrawn from an IRA to pay for long-term care insurance. The important part is understanding how the withdrawal is taxed and whether the coverage fits your retirement plan. Traditional IRA distributions are generally fully or partially taxable. Using that money for insurance does not automatically make the withdrawal tax-free.
That distinction matters. So does knowing what your options actually are.
Why consider using IRA money?
For many people, the hesitation around long-term care insurance comes down to one question: “Where would the money come from?”
You may have a substantial retirement account while still feeling reluctant to add another expense to your monthly budget.
That is why it can be worth examining whether a portion of your IRA could help fund coverage. The decision starts with how much of that account you need for everyday retirement income, emergencies and other goals.
Imagine a couple who has set aside money for retirement but has never decided how they would pay for ongoing care. If one spouse needed assistance, would they draw more from their investments? Would the other spouse provide the care? Would their adult children need to step in?
Insurance is one possible way to prepare. The first step is understanding how it compares with paying those expenses yourself.
If this is a question you’ve been putting off, join Turn Your IRA into Long-Term Care Protection, a free webinar with Suzanne Scheer, J.D., CLTC®, on October 19, 2026, at noon Eastern. The session will explore how retirement assets may help fund hybrid long-term care coverage and who these strategies may suit.
What should you know before using your IRA?
The amount you withdraw and the amount available for premiums may be different once taxes are considered.
With a traditional IRA, withdrawals generally count as taxable income to the extent they represent pretax contributions and earnings. Before age 59½, an additional 10% tax may also apply unless an exception is available. Qualified Roth IRA distributions are generally tax-free, but the qualification rules matter.
Before moving money, have your financial and tax professionals review the proposed withdrawal, the premium commitment and what would remain available for retirement.
Frequently Asked Questions
What does long-term care insurance cover?
Long-term care often means help with everyday activities, such as bathing, dressing or eating.
Coverage may help pay for care at home, in an assisted living facility or in a nursing home. If staying in your home is a priority, look closely at the home-care provisions. If you are considering long-term care insurance for assisted living, check which facilities and services qualify.
Benefits have conditions and limits. The amount available, the length of coverage and when payments begin all deserve attention.
Another common assumption is that Medicare will cover these expenses. Medicare does not pay for ongoing custodial care, including assistance with daily activities.
Where does hybrid long-term care insurance fit?
Traditional long-term care insurance is not the only option. Hybrid long-term care insurance combines long-term care benefits with life insurance or an annuity. The structure and benefits depend on the contract.
When comparing options, ask:
How much care could this policy help pay for?
What happens if I never need care?
What premiums would I need to pay, and for how long?
How much access would I have to the money afterward?
How would funding the policy affect my remaining retirement savings?
The answers matter more than a product label.
How much does long-term care insurance cost?
Your age, health and the coverage you select help determine the premium. Whether a policy makes sense also depends on your income, assets and retirement goals.
A long-term care insurance quote is a useful starting point. But when IRA money is involved, the review should include both the premium and the tax consequences of funding it.
A policy needs to fit your life today as well as the care you may need later.
Take the next step before moving any money
You do not need to choose a policy today. You can start by understanding whether this approach belongs in your retirement plan.
Join Suzanne Scheer, J.D., CLTC®, for Turn Your IRA into Long-Term Care Protection. She will discuss how these strategies work, who they may make sense for and options involving inherited IRAs.
Monday, October 19, 2026
12:00–1:00 p.m. Eastern
Free online webinar
Can’t attend live? Register to receive the replay.
You’ve worked hard to build your retirement savings. Take an hour to explore how those savings might also help you prepare for future care.
Reserve your place: Turn Your IRA into Long-Term Care Protection
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