| A follow-up question regarding retirement plans and Medicaid: Read on…
CLIENT QUESTION:
I have an irrevocable Medicaid Trust with you. As a follow-up question to your recent LISTEN TO LAWRENCE LETTER on September 12, 2023, Volume 4 Issue 172; I ask the following question: I understand that if I need to go into a nursing home my monthly IRA RMD (as determined by Medicaid) and Social Security would go towards the cost of my nursing home expenses. If the RMD & SS were not enough to cover the monthly expenses and assume I had no other assets other than retirement plans, would the retirement IRA principal be invaded to cover the shortfall or would the shortfall be covered by Medicaid?
MY RESPONSE:
The bottom line answer is that the shortfall would be covered by Medicaid. The principal amount in the retirement plans is not counted as an asset. Therefore, if you had $500,000 sitting in an IRA, and you already contributed the required minimum distribution ( as determined from Medicaid’s life expectancy charts), then the full $500,000 cannot be touched. Got it?
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