Are Retirement Assets Protected from Medicaid in Maryland?

Are Retirement Assets Protected from Medicaid in Maryland?

You’ve worked hard to build a nest egg for your golden years. Now you’re wondering, “Are retirement assets protected from Medicaid in Maryland?” As you consider the possibility of needing Medicaid for long-term care, what happens to the retirement savings you’ve meticulously accumulated?

In this article, we’ll discuss how retirement accounts impact Medicaid eligibility and what steps you can take to protect retirement assets.

So, Are Retirement Assets Protected from Medicaid in Maryland?

In Maryland, your retirement accounts are not hidden from Medicaid’s scrutiny. They are considered ‘countable assets’. So, when you’re asking, “Are retirement assets protected from Medicaid in Maryland” the straightforward answer is NO–they are not protected. This means they are considered when determining your eligibility for Medicaid.

Impact on Spousal Assets

  • For couples, when only one spouse is applying for Medicaid, the retirement accounts of the non-applicant spouse play a crucial role. In Maryland, they are included in the total count of spousal assets.
    • In Maryland, they are included in the total count of spousal assets.
  • However, there is a solution. By converting the retirement account into a Medicaid Annuity and distributing the income to the spouse, this income will not count against the spouse for Medicaid purposes.

In Maryland, retirement assets are not fully protected from Medicaid. However, careful planning with these assets, especially considering finances between spouses, can greatly help in meeting Medicaid eligibility requirements.

Medicaid’s Asset Limits in Maryland

Understanding Asset Limit Thresholds

Medicaid uses an asset limit to determine who is eligible for Medicaid. This threshold varies based on several factors, including your marital status and the specific Medicaid program you’re applying for.

Generally, the asset limit for an individual is $2,500. Exceeding the asset limit could lead to disqualification from Medicaid.

Exempt vs. Non-Exempt Assets

It’s important to distinguish between exempt and non-exempt assets when considering if retirement assets are protected from Medicaid.

Exempt Assets

These are assets that do not count towards your Medicaid asset limit. Exempt assets include:

  • Your primary home, provided it falls under certain equity limits.
  • One vehicle, which is necessary for transportation.
  • Personal belongings, like clothing and household items.
  • Certain types of burial funds, which are designated for funeral expenses.

Non-Exempt Assets

These are assets that are counted towards the Medicaid asset limit. These typically include:

  • Liquid assets like cash and bank accounts.
  • Additional real estate properties, apart from your primary residence.
  • Retirement accounts.

Effective planning and a clear grasp of these rules can help you maintain eligibility without jeopardizing your financial security.

How Retirement Assets Count Towards This Limit

In Maryland, if your retirement accounts are accessible, they are considered countable assets. This includes IRAs, 401(k)s, and other retirement savings.

This means the total value of these funds counts towards your overall assets, which can push your total assets over the Medicaid limit. So, it’s critical to think about your retirement account status when checking if you qualify for Medicaid in Maryland.

Factors Affecting Retirement Plans and Medicaid Eligibility

Accessibility of Retirement Funds

A key factor to consider is the accessibility of your retirement funds.


The extent to which you can access funds in your retirement accounts, like IRAs or 401(k)s, plays a significant role. If these funds are readily accessible, they are more likely to be counted as assets by Medicaid.

This means that easily accessible retirement savings could push your asset total above Medicaid’s threshold, affecting your eligibility.


Pensions may be evaluated separately. Their treatment depends on whether they are in payout status or are still accumulating.

A pension in payout status often counts as income rather than an asset, which may make your pension a non-countable asset.

Impact of Marital Status

Marital status also has a significant impact on how retirement assets are treated for Medicaid purposes.

Single Applicants

For single individuals, most retirement assets are likely to be considered countable if they are accessible and not in payout status. This includes the total value of retirement accounts.

Married Couples

For married couples, the situation is more complicated. The retirement assets of the spouse not applying for Medicaid could be considered differently, which might affect the applicant spouse‘s asset count for Medicaid.

Navigating these factors in Maryland requires careful consideration of the status and accessibility of your retirement assets. The best way to ensure you qualify for Medicaid and safeguard your assets is to speak with an elder law attorney.

How Can I Protect My Retirement Assets From Medicaid?

If you’re worried about the question “Are retirement assets protected from Medicaid in Maryland,” there are strategies that can safeguard these assets. It’s important to approach this with a well-thought-out plan, taking into account Maryland’s specific Medicaid rules.

Spousal Refusal

This strategy involves the non-applicant spouse refusing to make their assets available for the applicant spouse’s Medicaid eligibility. It’s a way to potentially protect retirement assets, but it should be approached cautiously and with legal advice, as it has complicated implications.

Converting Assets to Annuities

Converting retirement accounts into certain types of annuities may protect your assets, as specific annuities are not considered countable assets. However, it’s important to ensure the annuity meets Maryland’s Medicaid criteria.

Spend Down Plan

This involves strategically spending down assets to meet Medicaid’s asset limits. Common methods include:

  • Home improvements.
  • Debt repayment.
  • Pre-paid funeral expenses.

Utilizing Promissory Notes or Private Loans

This strategy converts a lump sum of assets into a stream of income through a legal agreement, potentially reducing countable assets for Medicaid eligibility.

Gifting Assets

Transferring assets to family members can be effective, but it must be done with caution due to Medicaid’s five-year look-back period. 

Medicaid Asset Protection Trust (MAPT)

A Medicaid Asset Protection Trust (MAPT) is a powerful tool in Medicaid planning. Assets placed in a MAPT are managed by a trustee and are no longer considered part of your countable assets. MAPTs allow you to protect your assets while ensuring you meet all requirements for Medicaid eligibility.

However, it’s essential to set up this trust correctly to comply with Maryland’s Medicaid regulations and look-back period.

Legal Consultation and Planning

It’s crucial to consult with a Medicaid and elder law attorney. They can help develop a personalized asset protection strategy, considering individual circumstances and Maryland’s specific rules.

Correctly using these strategies requires careful planning and an understanding of Maryland’s Medicaid rules. It’s best to get help from a professional who can guide you, making sure your retirement assets are protected while you maintain Medicaid eligibility.

Tips for Protecting Your Retirement Accounts from Medicaid

The Value of Early Planning

Start planning early to protect your retirement accounts from Medicaid. This is important because Medicaid’s look-back period can penalize certain transfers made within five years of applying. Early planning allows you to align decisions with your long-term care needs and goals.

Professional Guidance

Medicaid rules are complex, especially concerning retirement assets. It’s essential to seek advice from an elder law and estate planning lawyer. They understand the intersection of retirement assets, estate planning, and Medicaid rules–and can provide personalized advice for your unique situation.

Consulting an Elder Law Attorney

An elder law and estate planning lawyer will help you create a personalized strategy that considers your assets, family situation, and future healthcare needs.

Contact PathFinder Law Group

If you need help protecting your assets from Medicaid or have other questions related to “Are retirement assets protected from Medicaid in Maryland?” Schedule a Risk-Free Consultation today or call us at 443-579-4529.

About Adam Zimmerman

Adam Zimmerman is known for his unique ability to put people at ease. Within minutes of meeting Adam, his clients realize he is not the stereotypical attorney and is genuinely invested in helping them through their life situations. He is committed to empowering his clients to be decision makers in the process, so they are knowledgeable about the course of action they decide over their affairs.