Massachusetts has a protection for people who are still working. “Pension funds that are being set aside by an individual's current employer are not countable as an asset.” 130 CMR 520.007 (C)(3). This saves a community spouse from having to cash out their pension, but does nothing for retired people, or single people who need nursing home care, or self employed people!
If a single person needs nursing home, their retirement plan is countable and must either be annuitized, or cashed out and used for care. A community spouse who owns an IRA or retirement plan must annuitize it if the asset puts them over the community spouse resource allowance.
During the 2009 - 2010 session, the state legislature considered a bill (SB 540, HB 1094) that would help community spouses of nursing home residents retain their Individual Retirement Accounts (IRA’s) by making them non-countable assets when their spouse applies for MassHealth. The legislature failed to act on the proposal. This change in the law has been re-introduced in 201q, in a continuing effort to permit a community spouse of a nursing home resident to retain an IRA account from which they can receive distributions.
Current as of February, 2011.