IRA Rules

Archive for July, 2006

Question: Question about government benefit?

One of my friend has low income from her regular job salary, but she still tried to put away some money on her Roth IRA account. As you know, the earning in Roth IRA is tax free. But over the years, the penny stock she bought has grown a lot, and she sold it recently, and make a lot of capital gain. Now she is not poor, since she has some asset(cash) in her Roth IRA account, but at the meanwhile she is still poor since she can not take the capital gain out of her IRA account till she turns to 59 1/2 years old, otherwise, she need to pay penalty for early withdrawal.

So is she still qualified for government benefits? Like medicaid, food stamp.
Before she was qualified because she has the low-income job.

For example, on the medicaid renewal form, does she need to report her “asset” in her IRA account? If reported, that may causes her to lose her qualification for medicaid. But she needs the medicaid since she cannot afford the medical bill(low income job).

Thank you very much!

Answer: Yes,she has to report her IRA as an asset. If her assets are over $2,000,she will not be eligible for government benefits.
It is available money for her,even though she can’t take it out before she is 59 1/2 without a penalty,she could still take it out. Government benefits even take into consideration a life insurance policy since you could cash it out.
If her IRA is worth alot of money,she will most probably get cut off. If she sold her stock,she has to report that as income also.

Self-Direction — Can MY SD IRA/401K Purchase Property I Already Own?

Gold and Silver Bullion: Re—-Gold and Silver IRA Update