If you have a child or grandchild with a disability, your biggest fear is what will happen if you are no longer with them. For many, the answer is the Better Life Experience Achievement (ABLE) account. This account allows people with disabilities to set aside extra money without interfering with federal aid.
All but four states—Idaho, North Dakota, South Dakota, and Wisconsin—offer ABLE accounts aimed at alleviating poverty for people with disabilities. Some states, such as California and Pennsylvania, allow people from other states to invest in her ABLE program.
Account holders can invest their own money and protect their profits from taxes. Withdrawals are tax-free if the money is spent on approved expenses related to the account holder’s status. Also, most or all of the money in the ABLE account is not subject to asset limits that affect eligibility for safety net programs like Medicaid and his SSI (Supplemental Security Income).
Charlie Massimo, Senior Vice President and Financial Advisor, Wealth Enhancement Group, said:
ABLE accounts were established by the same laws that created 529 college savings plans. SSDI).
If you have reached the age requirement but are not receiving SSI or SSDI benefits, if you meet the Social Security definition and criteria for disability and are able to receive a letter of disability from your doctor certifying your condition, You may be able to open an ABLE account.
People with disabilities can only have one ABLE account, but anyone can contribute to an account. The maximum contribution for 2023 is her $17,000, but those who are able to work can make additional contributions up to their annual gross salary or an individual’s Federal Poverty Level (FPL). For individuals, her FPL in 2023 is $13,590. In some states, such as Ohio, contributions are deductible from state income taxes.
You can hold between $235,000 and $550,000 in your ABLE account, depending on state limits. If your ABLE account has a balance over $100,000, the excess may result in SSI suspension, assuming other accounts have a limit of $2,000. If your assets fall below the limit, you can reinstate your SSI. The $100,000 ABLE limit does not apply to benefits from Medicaid or the Supplemental Nutrition Assistance Program (SNAP) (formerly known as Food Stamps).
Without an ABLE account, many people with disabilities face a choice between increasing their savings or keeping benefits. Withdrawals are free of federal and state taxes when spent on “Qualifying Disability Expenses,” such as those that help improve quality.