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Preserving & Protecting
YOUR FAMILY'S ASSETS & LEGACY

Eligibility for Medicaid and retirement accounts

On Behalf of | Jul 14, 2021 | Blog, Elder Law |

Before entering a nursing home or assisted living facility, many seniors need to obtain Medicaid benefits to pay for the cost. However, qualifying for Medicaid involves falling within a relatively low income bracket and having fairly minimal assets.

New York’s Medicaid program treats qualified retirement accounts somewhat differently from how it treats other types of assets. Likewise, payments that people receive on a monthly basis from certain types of pension and retirement accounts may differ from other types of income in eligibility determinations. Applicants may have to balance their assets and income carefully to qualify for Medicaid.

401Ks

Certain types of savings accounts such as a 401K will not necessarily count as an asset that would prevent someone from obtaining Medicaid benefits. This is true only if a person is currently receiving the account’s minimum distribution amount on a monthly basis. However, that monthly payment may count as income that can put someone above the maximum income amounts.

Roth IRAs

Unlike other types of accounts that require people to take minimum distributions at a certain age, Roth IRAs do not have this type of requirement. As a result, this type of account may not be in active payout status that would categorize its funds as exempt from eligibility determinations.

Ultimately, seniors who are preparing to enter assisted living and their families need to plan carefully. Knowing what to expect can make the process a lot less stressful and may help to avoid unnecessary expenditures or a denial of eligibility for Medicaid benefits.

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