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Question

Can I use my 401(k) to pay for long-term care insurance without a penalty?

Answer

Yes, if your plan offers this feature. Under SECURE 2.0, eligible retirement plans may permit penalty-free distributions to cover certified LTC insurance premiums up to $2,600 in 2026 (indexed annually) or 10% of your vested account balance, or actual premiums paid, whichever is less. However, the distribution is still taxable as ordinary income.

Related FAQs

How do I find out if my employer’s 401(k) plan offers qualified long-term care distributions?

How do qualified long-term care distributions compare to paying LTC premiums with after-tax savings?

What qualifies as “certified” long-term care insurance under SECURE 2.0?
Insurance Solutions Disability Retirement Planning Long-Term Care Living in Retirement Healthcare & Medicare Health Conditions FAQs
Last Updated July 7, 2026
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