The money you saved for retirement gets taxed every time you touch it, and if you ever need long-term care, draining that IRA to pay for it is fully taxable. Here's the move most people never hear about: reposition a slice of it over 10 years into one policy that covers you and your spouse with a guaranteed, tax-free care pool, spreading the tax and helping satisfy your RMDs along the way.
Roth conversions are great, until you hit RMD age. Then reality sets in, and it's exactly the part a Roth can't fix:
Once you're at RMD age, the required withdrawal has to come out as taxable income, the IRS won't let you convert an RMD to a Roth. That taxable dollar is stuck.
A Roth conversion gives you tax-free growth, but zero guarantee of how much care money you'll have on the exact day you need it. You're hoping the market cooperates.
If a care event hits and you pull from the IRA to pay for it, every dollar is taxable, right when you can least afford the hit.
You take a slice of qualified money (IRA / 401k / 403b) and reposition it into a OneAmerica Asset Care policy, whole life insurance built to pay for long-term care. You don't lose the money. It just goes to work three ways at once:
A leveraged pool of long-term-care money that comes out income-tax-free under IRC §7702B, home care, assisted living, or nursing.
Never need care? A tax-free death benefit passes to your kids or beneficiaries. The money is never wasted.
An emergency arises before you ever need care? You have access to the policy's accumulated cash surrender value.
Guaranteed premiums, guaranteed benefits. Once issued, OneAmerica can't raise your premium or cut the benefit, it's a noncancellable policy.
This is what makes OneAmerica different from almost everything else: Asset Care can cover two lives on a single policy with one shared benefit pool. Whichever spouse needs care first draws from it, and with the lifetime Continuation of Benefits rider, that pool never runs dry, no matter how long either of you needs care.
You and your spouse are both insured under the same contract, sharing the same care pool. No buying two policies.
Add the Continuation of Benefits rider and the LTC benefits keep paying for your entire life, even after the base policy is exhausted.
The monthly benefit is available to both insureds, even if you both need care at the same time. One care event doesn't leave the other unprotected.
If neither of you ever needs care, the death benefit still passes to your kids, tax-free. You can't lose.
This is the gap nobody plans for. Social Security raises have run about 2.6% a year lately. Long-term-care costs have run roughly double that. Every year, the check falls a little further behind the bill.
Over 15 years your Social Security grows about 47%. Care costs more than double (+108%). The shortfall compounds every year.
A private nursing room in California right now (Genworth 2024), already 43% above the national median.
That same CA room at a moderate 5% a year. For one person. If both of you need care, double it.
*Medicare covers only limited skilled care (up to ~100 days), not ongoing custodial long-term care. Sources: Genworth / CareScout 2024 Cost of Care Survey (California & national medians); SSA COLA history; U.S. HHS / ASPE lifetime-risk data; Medicare.gov. Future-cost figures compound the 2024 median at the rate shown and are illustrative.
Default is the 10-year IRA drain: turn required distributions into a leveraged, tax-free care pool for both of you, spreading the tax and helping satisfy your RMDs. Prefer to write one check and be done? Flip to single lump. Set the ages to mirror your situation.
Approximate, anchored to real OneAmerica Asset Care illustrations (California, age 70–71, Preferred Non-Tobacco), scaled for premium and age. Your exact figures for your ages, health, and joint-vs-single come on a personalized illustration. Not a quote or offer. Guarantees are subject to the claims-paying ability of The State Life Insurance Company. Not tax or legal advice.
Here are two real Asset Care illustrations, both California, $100,000 repositioned. Same premium, two different priorities, you pick which matters more to you.
Care is just one call away. If a care event happens, a OneAmerica Care Benefit Concierge coordinates doctors, eligibility, and direct payment to your providers, so your family can focus on you, not paperwork.
Both use IRA money. Only one guarantees the care is there, to the dollar, for both of you.
| Roth conversion | Asset Care 10-pay | |
|---|---|---|
| Can it handle your RMD? | No, RMDs can't be converted | The distribution can help satisfy your RMD* |
| Tax timing | Full amount taxable when converted | Spread over 10 years |
| Guaranteed care dollars? | No, depends on the market | Yes, guaranteed pool, day one |
| Care benefits taxed? | Withdrawals for care are taxable | Tax-free under §7702B |
| Covers your spouse too? | No | Yes, joint, one shared pool |
| Leverage on your dollar | 1× (only what it grows to) | ~3× to lifetime |
| If you never need care | Heirs inherit the Roth | Tax-free death benefit to heirs |
RMDs are not eligible for Roth conversion (they're not eligible rollover distributions). Tax treatment depends on your situation, this is educational, not tax or legal advice. Talk to your tax professional.
Long-term care is a promise you might not call on for decades. It matters who's standing behind it.
Drop your info and I will build a personalized OneAmerica illustration on your ages, single or joint, and send it over. No cost, no pressure.
Your exact age, single or joint, and how much you'd want to reposition, I'll build your personalized OneAmerica illustration and walk you through it. No pressure, no jargon.
📞 Call Hans, (410) 340-4827 Text me a question