Friday, June 8, 2018
ABLE Accounts Give Disabled More Financial Freedom
36 States and the District of Columbia have joined behind the federal government after Congress passed the Achieving a Better Life Experience (ABLE) Act of 2014. ABLE accounts allow those individuals that have developed a qualifying disability prior to reaching the age of 26 (or their parents, relatives, or friends) to invest up to $15,000 per year and still be able to tap into it tax-free.
These accounts allow people with disabilities to save and invest money without fearing that they will lose their government benefits. Before the passing of the Act individuals would lose their Supplemental Security Income (monthly stripend) and their Medicaid (medical insurance) from the government if they held more than $2,000 in their own name. With the new ABLE accounts, individuals can have up to $100,000 without it affecting their SSI and there's no maximum balances for Medicaid benefits. And under the new tax law, you can also roll over money from a 529 college-savings account to an ABLE, up to the $15,000 total annual contribution limit.
10 states also give a tax deductions for contributing to an ABLE account. This biggest appeal, of course, is that it gives people with disabilities a sense of self-worth and pride because they can save money in their own name without jeopardizing their much-needed government benefits.
See Kimberly Lankford, ABLE Accounts Give Disabled More Financial Freedom, Kilpinger, June 7, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.