What Is an ABLE Account? An Introduction
These tax-free savings accounts, which allow many people with disabilities or their families to save while remaining on gover...Read more
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We have previously written about the pros and cons of ABLE (Achieving a Better Life Experience Act of 2014) accounts. Now let's take a look at some the practical uses of such accounts.
These accounts allow many people with disabilities or their families to establish tax-free savings accounts that won’t affect their ability to qualify for, or remain on, government assistance as long as the account balance does not exceed $100,000.
But ABLE accounts can be more than simply a savings vehicle. The accounts can be used in many creative ways, either alone or in conjunction with other planning tools, to make a big difference to families with special needs children.
Any adult child with special needs who owns more than $2,000 in countable assets is generally ineligible for many public benefits programs, including Medicaid and Supplemental Security Income (SSI).
But because an ABLE account with a balance below $100,000 is not counted as a resource for most public benefits programs, the account provides an opportunity for planning to ensure that the child does not become ineligible because of wages, gifts, or other sources of funds that may become available to her.
Here are five practical uses for an ABLE account that could have a significant impact on a beneficiary’s quality of life:
When it comes to planning for your child’s needs, it is important not only to consider the advantages of an ABLE account standing alone, but also to realize that an ABLE account can be used in conjunction with other planning tools, such as a special needs trust. With a variety of tools, you can craft a strategy that best fits your child’s needs now — and in the future. Even as just one piece of a larger puzzle, an ABLE account may be able to offer so much more to your child.
To find out how an ABLE account might benefit your child with special needs, contact a special needs planner in your area.
Full description of infographic: Title reads "Why Consider an ABLE Account?" and features 11 blocks of content that read as follows: Congress passed the Achieving a Better Life Experience (ABLE) Act in 2014; For families who have dependents with disabilities: The ABLE Act provides a way to set aside savings money, tax-free, for their loved one; ABLE Accounts can hold up to $100,000; ABLE Accounts are for people with disabilities who were diagnosed with a disability before age 26; Individuals with disabilities can manage their own ABLE accounts, giving them a measure of financial independence; Up to $17,000 per year can be contributed to an ABLE Account; Nearly 120,000 have ABLE accounts nationwide; ABLE Accounts can help pay for disability treatment, assistive technology, education and training, housing, living expenses, health care, legal fees, and transportation; As of 2022, 46 states as well as the District of Columbia have active ABLE account programs in place; Did You Know? ABLE account owners are not at risk of losing their eligibilty for government benefits, such as SSI or Medicaid; Find an ABLE Account program in your state: specialneedsanswers.com/able-accounts.