Say Goodbye to your IRA

13 May 2023 · 1 min

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In this segment, the speaker warns viewers that many state Medicaid programs require individuals to spend down their retirement assets—such as IRAs, 401(k)s, and possibly a spouse’s accounts—before they can qualify for Medicaid coverage of nursing‑home care. The speaker emphasizes that the spend‑down must follow Medicaid‑approved methods; otherwise, the transfer may be classified as an illegal gift, triggering penalties and forcing the individual to pay privately for nursing‑home services. The message serves as a cautionary alert for anyone planning long‑term‑care financing, highlighting the importance of understanding state‑specific Medicaid spend‑down rules and complying with them to avoid loss of benefits.

Chapters

Do you live in a state that's on this list? If you do not, if you live in some other state than the ones on this list, that means that your state Medicaid program will require you to spend your IRA and your 401 and maybe that of your spouse's before you'll be eligible for benefits in a nursing home. And that doesn't mean that you can go on around the world cruise with it or give it to your kids. You have to spend it in a way that Medicaid says you can. If you spend it in a way that Medicaid does not approve of, then it may be deemed a gift and you'll be penalized and required to private pay at the nursing home.