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I realize you have a question about social security. My goal is to provide you with excellent service, and help you better understand your options.
How are you today? I am sorry to hear about your situation.
How much does your wife receive from Social Security?
Its actually more specifically about medicaid?
I want to make sure that she's eligible first, before we get into discussing the rest of the question...if her income is too high, then she can't participate.
My wife gets $1316. a month after taxes and medicare from SSDI
She does not have any other income
OKay, then she meets the income requirement. As far as assets go, your assets count towards her eligibility.
You can keep your home, plus 1/2 of the assets up to $109,560
So you will have to spend down half of your retirement assets, unfortunately.
But, if you inherit the home, and live there, you won't lose that.
What about after she qualifies? Can I start contributing to my 457 plan again or will that count against her?
Well, 1/2 of the asset would have to go towards her, and you couldn't ever accumulate more than $109,560
If I inherit some of my Moms IRA will that count against her?
The assets of the spouse are counted...so 1/2 of it would have to be spent down, and you couldn't retain more than $109,560
So the answer to both questions is no? Even if the money is left to me? and the 457 is in my name?
That is correct. A spouse's assets are counted, even though their income is not.
What about a secondary residence or a rental property?
Unfortunately, that would be a countable asset
You would need to spend down that asset as well.
based on what I disclosed in my initial question how much do I need to spend down?
what if i sold the house?
Then, you could keep 1/2 of the funds, up to the limit I disclosed above
Let me double check to make sure assets in just your name are not required to be spent down.
As I said the 457 is mine through my employer so is the supplemental annuity(through my employer)
The house would be left to me
Yes, I realize that. Let me double check.
additionally will I be penalized for having to cash in the 457?
Yes, if you had to cash in the 457 plan as you are under 59.5 you would be penalized 10%
Even if it is because there is unexpected medical emergency? I thought that was allowed?
Yes, both of your assets count towards the limit. So you would have to spend it down.
The information on this can be found, HERE
You can get a penalty free withdrawal to the extent that you have medical expenses over 7.5% of your AGI
What is AGI?
Adjusted Gross Income
Its from your tax return
Also I dont think 59 1/2 age limit applies to 457 only 401k and 403b
You're correct. You would not be penalized, unless you had rollover funds inside your 457 which came from one of those sources
Can u give an example have of how what my medical expenses would have to be to avoid penalty?
I dont. It has all been from 457 plans.
You won't be subject to the penalty
You won't be subject to the penalty then
I wont be subject to penalty because it is 457 plan?
That is correct
Ok so I can Leave the annuity of $61000. alone cash in the 457 down to 38,000.?
and obviously stop contributing to both?
Yes, so long as your assets are below the limit as specified
and yes, there would be no point in contributing to these assets
isnt the first $23,000. not counted?
Is there a limit in the value of the house?
It is probably worth $600,000.
There's not a limit on the house, provided the community spouse is still living there. If you moved from the house, then you would have to sell it and spend the assets down.
How it works, is that you can keep the greater of 1/2 of your resources up to the limit, or $21,912
So if you only had $20,000 you could keep all $20,000.
but in your case you can only keep half.
ok. Thanks. It sucks. Dont get sick
I know it. Or, purchase long term care insurance when you're young.
My wife initially got sick when she was 34. So long term care insurance was never really an option.
Yes, that is very young.
If I am left a trust by my Mother with a monthly stipend instead a lump sum will that make a difference?
That will be income to you, and the trust is not your asset.
The trust is a separate legal entity, so if all you get is income from that, the assets in the trust are safe.
So that would probably be the best option for me
Yes, it would
Is there anything else that I can assist you with today?
ok. Yes how can I print this up?
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