The average age of a Connecticut resident is growing older. This trend is in line with the rest of the U.S. More attention will need to be paid to the level of long-term care that you will eventually require. This area is where transferring your Individual Retirement Account (IRA) to a Medicaid-Compliant Annuity (MCA) may be useful.
What is an MCA used for?
Medicaid planning involves a great many variables that must be accounted for. One of them will be spending down some of your assets. This may be required before you are eligible to receive Medicaid. One of the best ways to handle this transaction will be to transfer your IRA to a Single Premium Immediate Annuity (SPIA).
The most popular type of SPIA used in a transfer of this nature is an MCA. Its main purpose will be to convert your excess assets into an income stream with zero cash value. It is also commonly used as a part of routine crisis planning. The goal will be to convert your IRA to an MCA that is fully compliant with Medicaid.
How does an MCA become Medicaid-compliant?
Other issues involving Medicaid in Connecticut may need to be addressed. These may affect your ability to render all of your assets compatible with the level of care you receive. Certain key features of an MCA are designed to ease this transition.
To be compliant with Medicaid, the annuity must be irrevocable. It must also be non-assignable. The annuity will be required to make an equal number of monthly payments. You must name the Medicaid agency in Connecticut as a beneficiary. An MCA meets all of these prerequisites.