This year Money Smart Week comes at a significant time for the disability community. So far in 2017, eight states have launched ABLE plans, adding to the 10 plans already open.
ABLE plans are tax-free savings accounts for people with disabilities that allow them to save without impacting their public benefits such as SNAP, Medicaid and SSI. The implementation of these plans has been a huge feat for individuals with disabilities as it increases their financial independence and inclusion in their communities.
As determined by the Achieving a Better Life Experience Act (ABLE Act), an ABLE plan can be used to pay for any expenses related to the blindness or disability of the individual with a disability, including:
• Employment training and support
• Assistive technology and personal support services
• Prevention and wellness
• Financial management and administrative services
• Legal fees
• Expenses for oversight and monitoring
• Funeral and burial expenses
• Other expenses that otherwise enhance the account owner’s quality of life
ABLE plans are modeled off of 529 college savings plans, in that the earnings on contributions grow tax-free while invested, and tax-free if withdrawn for qualified disability expenses. That means your money may grow more quickly than assets in a taxable account. In addition, contributions made into an ABLE account may be eligible for state tax benefits.
ABLE plans are designed for people of all ages, with all types of disabilities and medical conditions. An eligible individual experiences a disability onset prior to his or her 26th birthday AND:
1. Is entitled to SSI or SSDI
2. OR has physician’s certification indicating he/she has a marked or severe functional limitation, which is expected to result in
death, or has lasted/can be expected to last for a continuous period of not less than 12 months.
Questions? Join our team for an ABLE webinar on April 27 at 3pm CT/4pm ET. We are happy to answer your questions!
By: Deborah Goodkin, Managing Director, Savings Plans, First National Bank of Omaha