WAG 07-04-x: Pension Plans, Retirement and Educational Accounts, ABLE Accounts

PM 07-04-10

Tax-preferred Pension plans, Retirement and Didactics accounts, new manual materialand ABLE accounts are exempt from consideration as an asset. Successor retirement accounts that are exempt from federal tax are also exempt.

Alimony Plans/Retirement Accounts

Post-obit is a list of the exempt alimony/retirement accounts and a cursory description.

Pension Program/Retirement Account What is It? Authorized Under
Pension or traditional divers-do good programme* Employer-based retirement plan that promises retirees a sure benefit upon retirement, regardless of investment performance. Section 401 of the Internal Revenue Lawmaking
Greenbacks Residual Plans Employer-based hybrid program that combines features of defined benefit and defined-contribution plans. Section 401(a) of the Internal Revenue Code
Employee Stock Ownership Plan Similar to a turn a profit-sharing plan that must be primarily invested in the employer's stock and under which distributed benefits must be offered in the form of the employer'south stock. Section 401(a) of the Internal Acquirement Code
Keogh plan** Breezy term for retirement plans available to cocky-employed people. Section 401(a) of the Internal Revenue Code
Money Purchase Alimony Programme Employer-based divers contribution plan nether which annual contributions are fixed past a fix formula. Section 401(a) of the Internal Revenue Code
Profit Sharing Programme Employer-based defined-contribution plan nether which employer contributions may (but need non) be linked to profits. May provide 401(k) accounts. Section 401(a) of the Internal Acquirement Code
Elementary 401(k)* 401(yard)-type programme available only to small businesses: exempt from certain restrictions and subject to some limitations on employer contributions. Section 401(a) of the Internal Revenue Lawmaking
401(k) plan* Defined-contribution plan that allows employees to contribute to their accounts from their salary or wages on a pre-taxation basis (with earnings tax-exempt until withdrawal). Employers may or may not contribute. Section 401(a) of the Internal Acquirement Code
403(a) Plans that are similar to 401(a) plans only are funded through annuity insurance. Department 403(a) of the Internal Revenue Code
403(b) programme* Revenue enhancement-sheltered annuity or custodial account plan offered by certain tax-exempt organizations and public educational institutions. Many are bacon reduction plans that wait similar 401(k)s. Section 403(b) of the Internal Revenue Lawmaking
Private Retirement Business relationship (IRA) Vehicle for tax-deferred retirement saving controlled past individuals rather than employers. Many IRAs were previously employer-based accounts that individuals converted into an IRA when they left their job. Section 408 of the Internal Acquirement Code
Unproblematic IRA Employer-based IRA available only to small businesses. Section 408(p) of the Internal Revenue Code
Simplified Employee Pension Plan Employer-sponsored program bachelor simply to modest businesses; allows employers to contribute to employee accounts that essentially function as IRAs. Section 408(k) of the Internal Revenue Code
Roth IRA Like to an IRA but with dissimilar income limits and taxation treatment. Section 408(A) of the Internal Revenue Code
457 program* Program offered past state and local governments and non-profit organizations. Department 457(b) of the Internal Acquirement Code
501(c)(xviii)* Plan offered by and large past unions. Had to be ready upward prior to June 1959; now largely obsolete. Section 501(c)(18) of the Internal Revenue Lawmaking
Federal Employee Thrift Savings program* Programme offered by the federal regime to its employees. Department 8439 of Title 5 of the US Code

* Already exempt from the SNAP asset examination prior to 10/01/08

** Keogh plans that involve a contractual obligation with someone who is not a household member were already exempt from the fooSNAP asset examination prior to 10/01/08.

Educational Accounts

The post-obit educational accounts are likewise excluded:

  • funds in a qualified tuition program described in section 529 of the Internal Revenue Code; or
  • funds in a Coverdell pedagogy savings account under section 530 of the Internal Revenue Lawmaking.

new manual material ABLE Accounts

Tax exempt savings accounts established to provide secure funding for disability-related expenses for designated beneficiaries found disabled before historic period 26.