IRAs, 401(k)s, 403(b)s, and similar retirement accounts are countable Medicaid resources in most states if you can withdraw the balance and you are not receiving regular periodic payments. Texas, Florida, Ohio, and New York generally exclude the account from the asset test once you enter payout status, but the distributions then count as monthly income. California reinstated asset limits on January 1, 2026 at $130,000 per person, so large retirement balances can still affect eligibility even when the account sits in payout status.
Medicaid does not treat an IRA or 401(k) as a special category. Caseworkers ask three questions. Do you own it? Can you convert it to cash? Are you already receiving regular periodic payments from it?
If you own the account and you can withdraw funds, but you are not in payout status, the balance lands on your countable resources list. Social Security Program Operations Manual System section SI 01120.200 sets the backbone that many state Medicaid manuals adopt.
Harold, 71, in Plano holds $86,000 in a Fidelity traditional IRA. He stopped working at 65 but never started withdrawals. Texas Health and Human Services counted the full $86,000 against his $2,000 resource cap in a 2025 nursing-home application. Harold assumed retirement money was protected because he paid taxes when he earned it.
The account type does not change the first step. Traditional IRAs, Roth IRAs, 401(k)s, 403(b)s, Keogh plans, and SEP-IRAs all face the same ownership and access test. Read our Medicaid asset limits guide for the dollar cap that applies after you label the retirement line countable.
Common mistake:Families often list only bank accounts on the Medicaid worksheet and skip retirement logins. Unreported IRA balances trigger denials and extended financial review. Pull every retirement statement before you file.
Payout status means you receive regular, periodic payments from the retirement account. The payment schedule can follow IRS required minimum distribution rules, or it can follow a voluntary schedule that your plan administrator accepts.
Once payout status begins, the principal balance usually leaves the resource test. The monthly or quarterly distribution enters the income test instead. That trade-off matters when your Social Security and pension already sit near the state income cap.
Florida AHCA applies the same framework for Institutional Care Program Medicaid. Gloria, 78, in Sarasota owns a $34,000 IRA at Wells Fargo. She started monthly RMD withdrawals of $310 in January 2026. The county excluded the IRA principal but added $310 to her unearned income each month.
Ohio Administrative Code rule 5160:1-3-03.10 states that a retirement fund with regular guaranteed lifetime payments is income, not a resource. If you can only convert the fund to a lump sum, Ohio counts it as a resource at the net amount after early-withdrawal penalties.
Use the Florida Medicaid spend down calculator to see how moving an IRA into payout status changes both the resource total and the monthly income figure.
A traditional IRA and a 401(k) hold pre-tax dollars. Withdrawals create ordinary income. Medicaid still counts the account balance as a resource until payout status begins, regardless of the tax treatment.
A Roth IRA holds after-tax contributions. Qualified withdrawals are tax-free, but Medicaid does not give Roth accounts a free pass on the resource test. Ohio Medicaid policy MEPL-164 states that Roth IRAs lack RMDs, so you must set up regular periodic payments voluntarily before the balance stops counting.
Patricia, 67, in Parma keeps $52,000 in a Roth IRA at Vanguard. She is not old enough for IRS required minimum distributions. Ohio Job and Family Services counted the full balance until she began $400 monthly withdrawals based on SSA life expectancy tables.
Employer 401(k) plans add a wrinkle when you still work. Some plans block in-service withdrawals. If you cannot access the funds without leaving the job, a few state manuals treat the account as unavailable. Confirm that rule with the agency where you will file before you quit work solely to unlock the plan.
Defined benefit pensions differ from account-based plans. If you receive a monthly pension check, the stream is income. If you can only take a lump-sum buyout, the lump sum may count as a resource, as the Ohio Supreme Court held in Miller v. Department of Job and Family Services in 2026.
When only one spouse applies for nursing-home Medicaid, the agency totals couple resources first, then applies the Community Spouse Resource Allowance. Retirement accounts in either spouse name can enter that total.
Texas HHSC treats a community spouse IRA the same way it treats the applicant account. If the community spouse IRA is not in payout status, the balance counts toward couple resources before CSRA planning.
Some states exempt the non-applicant spouse retirement account entirely. Pennsylvania exempts the community spouse IRA without payout status. Texas and Ohio do not grant that blanket exemption.
David and Elaine in Houston hold $120,000 in David IRA and $45,000 in Elaine IRA. David enters a skilled nursing facility and applies for Texas Medicaid. The state counted both balances toward couple resources before applying the 2026 CSRA of up to $162,660 for Elaine.
Pair this section with the Medicaid countable assets list so you see how retirement accounts sit beside bank accounts, brokerage holdings, and extra vehicles on the same worksheet.
Common mistake:Rolling a spouse IRA into the applicant name to simplify paperwork converts an account that might have stayed exempt in another state into a countable resource. Keep accounts in the original owner name until an elder law attorney reviews the plan.
Moving an IRA into payout status solves the resource test but opens the income test. Required minimum distributions count as unearned income in the month received, even if you reinvest the check.
Texas, Florida, and several other states cap nursing-home Medicaid income near $2,982 per month in 2026. Social Security of $1,850 plus an IRA RMD of $900 puts Harold over the cap by $768. He needs a Miller Trust to divert the excess to the nursing facility before Medicaid pays.
New York does not use the same income cap for most community and nursing-home pathways, but IRA distributions still raise net available monthly income figures that affect cost-sharing and spend-down math.
Ruth, 74, in Albany receives $1,620 from Social Security and $480 from an IRA in payout status. Her combined $2,100 sits below many New York income thresholds, but the IRA principal no longer counts toward the $33,038 resource cap for 2026.
Cash-value life insurance follows a parallel pattern: the account may count as a resource or as income depending on structure. Read life insurance and Medicaid countable rules before you restructure multiple financial products at once.
The table below summarizes how five high-traffic states treat applicant retirement accounts for long-term-care Medicaid in 2026. Your county caseworker applies the manual for the program you select, whether nursing home, HCBS waiver, or community Medicaid.
California numbers reflect the reinstated asset cap, not the brief period when Medi-Cal dropped resource tests entirely. New York figures reflect GIS 25 MA/15 and the January 2026 policy shift on distribution amounts.
We verify figures against state manuals and publish methods at our editorial policy.
| State | Applicant IRA/401(k) not in payout | Applicant IRA/401(k) in payout status | 2026 individual asset cap |
|---|---|---|---|
| Texas | Countable at full balance | Principal exempt; distributions are income | $2,000 |
| Florida | Countable at full balance | Principal exempt; distributions are income | $2,000 |
| Ohio | Countable at net after early-withdrawal penalty | Principal exempt; distributions are income | $2,000 |
| New York | Countable unless total resources stay under cap | Principal exempt with periodic distributions; amount flexible after 2026 rule change | $33,038 |
| California | Countable toward Medi-Cal resource total | Principal may still count toward $130,000 cap; distributions are income | $130,000 |
Retirement account rules share federal vocabulary, but state manuals diverge on payout requirements and spouse treatment. Texas HHSC implements SSI POMS sections SI 01120.200 through SI 01120.210 for STAR+PLUS and institutional Medicaid. An untouched IRA counts in full against the $2,000 cap.
Florida DCF uses the same payout-status framework for the Institutional Care Program. Gloria in Sarasota cleared her resource test with RMDs but needed income planning when Social Security plus distributions approached the state cap.
Ohio Department of Medicaid codified retirement fund rules at OAC 5160:1-3-03.10. Policy letter MEPL-164 clarifies Roth IRA voluntary payments and confirms that RMDs satisfy the maximum-benefit requirement for traditional accounts.
New York Department of Health GIS 25 MA/15 took effect with January 2026 applications. Periodic payments still exclude IRA principal, but consumers no longer must maximize distributions using actuarial tables when they are under IRS RMD age.
California DHCS reinstated asset limits at $130,000 per person on January 1, 2026. A San Jose applicant with an $95,000 IRA and $40,000 in checking sits at $135,000 in countable resources and needs a spend-down plan even if the IRA pays monthly distributions.
Run the California, New York, and Ohio calculators to match retirement totals to each state cap.
Common mistake:Applying Texas payout-status logic to a Pennsylvania application misstates spouse IRA treatment. Pennsylvania exempts the community spouse retirement account without RMDs. Match the worksheet to the state where the applicant will file.
Retirement accounts often hold the largest single balance on a Medicaid worksheet. After you label each IRA and 401(k) countable or exempt, run the numbers through a state calculator.
Start with the Florida, Texas, New York, California, and Ohio tools if your parent may file in one of those states.
Return to the asset limits guide when you need CSRA figures, home equity thresholds, or a full countable-versus-exempt refresher.
Medicaid counts your IRA as a countable resource in most states if you can withdraw the balance and you are not receiving regular periodic payments. Texas, Florida, Ohio, and New York generally exclude the principal once you enter payout status, but the withdrawals count as monthly income. California counts IRA balances toward the $130,000 individual resource cap reinstated on January 1, 2026.
A 401(k) follows the same rules as an IRA in nearly every state Medicaid manual. If you can access the funds and you are not in payout status, the account balance counts toward your resource limit. Employer plans that block in-service withdrawals may be treated as unavailable until you separate from employment, but that exception is narrow and program-specific.
In payout-status states, starting RMDs or other regular periodic payments usually removes the IRA principal from the asset test. The distribution amount then counts as unearned income. If your total income exceeds the state nursing-home cap, you may need a Miller Trust in Texas, Florida, or similar income-cap states before Medicaid approves coverage.
When one spouse applies for nursing-home Medicaid, most states total both spouses countable resources before applying the Community Spouse Resource Allowance. Texas and Ohio count a community spouse IRA that is not in payout status. Pennsylvania exempts the community spouse retirement account without requiring distributions. Check your state manual before moving accounts between spouses.
Roth IRAs face the same resource test as traditional IRAs. Because Roth accounts have no IRS required minimum distributions, Ohio and several other states require you to set up voluntary periodic payments before the balance stops counting as a resource. The withdrawals still enter the income test even though they may be tax-free.
A full IRA liquidation creates ordinary income tax and may push you over the resource limit in the month the cash lands in checking. If you gift part of the withdrawal to a child within five years of applying, Medicaid may impose a penalty period. Pay allowed expenses directly or fund exempt items such as prepaid funerals within state limits instead of gifting cash.
