You will lose your IRA here

20 Aug 2023 · 1 min

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0:32

In this brief video, the speaker warns viewers that many state Medicaid programs require individuals to spend down their retirement accounts—such as IRAs, 401(k)s, and possibly a spouse’s accounts—before qualifying for Medicaid-covered nursing‑home care. The speaker emphasizes that the spend‑down must be done only in ways approved by Medicaid; using the funds for non‑qualified purposes (e.g., a world cruise or gifting to children) can be classified as an illegal gift, leading to penalties and forcing the individual to pay privately for nursing‑home services. The message is aimed at residents of the listed states, urging them to understand and comply with their state’s specific Medicaid spend‑down rules.

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.