IRA’s and Medicaid Planning
A client is trying to do some medicaid planning for nursing home coverage. It seem to recall that a Traditional IRA is not considered an asset if the ira owner is age 70-1/2 or greater, as RMDs technically turn the account into an income stream. Am I correct on that? And if so, then a Roth does count as an asset since there are no RMDs. Does any of this sound right?
Permalink Submitted by Alan Spross on Wed, 2012-08-29 23:03
It is hazardous to generalize, since Medicaid planning can vary by state. I doubt that a non annuitized IRA would be exempt, but possibly an annuitized IRA annuity could be useful in certain situations. Annuitization is tricky because even if an applicant passes the assets test, they may fail the income test. Another large variable is the difference in planning for an individual vrs a married couple.
Permalink Submitted by Bruce Steiner on Thu, 2012-08-30 01:38
The treatment of IRAs in the Medicaid context varies from state to state. The original poster didn’t say in which state his client lives. He may wish to consult with another lawyer in that state who is more familiar with Medicaid.
Permalink Submitted by Dennis Prout on Thu, 2012-08-30 18:18
Alan & Ben, thank you for your responses. We are in Michigan, and we already informed the client that it would be best for him to speak to an attorney, but we would try to get some information for him if we could.
Permalink Submitted by Paul Sypher on Thu, 2015-09-17 20:54
Does Medicaid in Pennsylvania count a traditional IRA as an asset or is the income from the IRA counted towards the income threshold for Medicaid. Person turns 70 in a month but has been drawing a consistent amount from his IRA for several years.