Ira Withdrawal Form

April 12th, 2007

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: She has to report this amount, Usually if it is an amount she can’t access and is not ‘liquid’ it will not hurt her chances of qualifying. That being said if she doesn’t turn it in to them and they were to find out that is fraud. She could have to repay whatever benefits she received back and/or pay a fine/serve jail time. I know in Indiana where I am they are very serious about these things and they will check up on it. Its not worth the risk.

Gold is an excellent form of protection for your IRA and 401K