Empowering Disability Savings Accounts
ABLE accounts, or Achieving a Better Life Experience accounts, are specialized savings accounts designed for individuals with disabilities and their families. These accounts provide a way to save and invest money without jeopardizing eligibility for certain means-tested government benefits like Medicaid and Supplemental Security Income (SSI).
Key features of ABLE accounts include:
Tax Advantages
Contributions to ABLE accounts are not tax-deductible, but the earnings on the investments grow tax-free, and withdrawals for qualified disability expenses are also tax-free.
Contributions
Annual contributions to an ABLE account are subject to limits set by each state, and the total account balance is capped.
Qualified Disability Expenses
Funds from ABLE accounts can be used for a variety of disability-related expenses, such as education, housing, transportation, healthcare, assistive technology, and more.
Eligibility Criteria
To open an ABLE account, the individual must have been diagnosed with a significant disability before the age of 26. Additionally, the disability must be expected to last at least 12 months or result in death.
State-Specific Programs
ABLE accounts are administered by individual states, and each state has its own program with its own rules and features. Individuals can choose to open an account in any state's program, regardless of where they live.
Coordination with Government Benefits
ABLE accounts are structured to complement government benefits. Funds in the account do not count against the $2,000 asset limit for SSI, and they also do not affect Medicaid eligibility.
It's important to note that information may change often. If you are considering an ABLE account, we recommend checking with your specific state's ABLE program or consulting a financial advisor for the most up-to-date information. You can also review this informational webinar we hosted in partnership with ABLE accounts.