| Today we are discussing a follow-up question from my last LISTEN TO LAWRENCE LETTER. In the last letter, I stated that ALL retirement plans are exempt from Medicaid as long as you are withdrawing what Medicaid considers to be their own version of a Required Minimum Distribution (RMD), based upon Medicaid’s life expectancy table.
CLIENT QUESTION:
Does this mean that if you are younger (under the distribution age of your IRA) that Medicaid can still force you to withdraw from your IRA to pay your bills?
MY RESPONSE:
Yes, your IRA, including Roth IRAs, 401Ks, 403Bs, and the like are NOT exempt UNLESS you are withdrawing the RMDs as described above. This is true at any age. For example, if you had to go to a nursing home at the age of 45, you would still have to withdraw a certain amount out of your IRA each year. The amount withdrawn is considered your income which must first be applied to your care (with certain exceptions).
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