Mr. Jacobs is right on the money with this prescription. Americans need a tax advantaged vehicle to save for retiree medical expenses. Medical expenses are growing fast and are quickly crowding out spending on things that retirees WANT to do in retirement, such as golf, travel……EAT.
My idea is a little different than Mr. Jacobs. I wouldn’t create a whole other set of plans – do we really need more confusing contribution plans? What needs to be done is allow for greater contribution limits and allow a certain amount of money that is in these 401(k), IRA, 403(b), 457(b), etc to be withdrawn TAX FREE for certain medical expenses, including long term care insurance. This wouldn’t solve our health care problems, but it would give additional incentives for people to save for retirement needs – which will include medical expenses.
Scott Dauenhauer, CFP, MSFP