Financial Intel Monthly

Using Immediate Annuities for Medicaid Planning

Aug 20, 2011 11:07:37 AM / by The Retirement Group (800) 900-5867

Using Immediate Annuities for Medicaid Planning


An immediate annuity is a contract with an insurance company that gives the owner the right to receive periodic payments for a specified period of time (or for life) in return for one or more premium payments. An immediate annuity may help you qualify for Medicaid and preserve assets for your spouse by converting a lump sum of cash that is a countable resource into an income stream.

Caution: Guarantees are subject to the claims-paying ability of the annuity issuer.

  • An annuity contract is attractive if you want to qualify for Medicaid, potentially preserve assets for your loved ones, and you anticipate the need for long-term care

Key Strengths

  • Can increase income for at-home spouse
  • Helps Medicaid applicant qualify for Medicaid
  • Avoids Medicaid waiting period

Key Tradeoffs

  • Control over assets is lost
  • It might be ineffective in an income-cap state
  • The state may get the remainder of the annuity payments upon your death
  • It is not embraced in all states

Variations from State to State

  • Not embraced in all states

How Is It Implemented?

  • Gather information about your income, assets, and transfers of same for the past five years
  • Consult an attorney who is experienced with Medicaid planning in your state and an insurance professional

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by,,,,, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with  FSC Securities and may be reached at

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