Recipients of Supplemental Security Income who need help paying for their disability expenses can achieve a better life experience ( ABLE) You have the option to open an account.
See also: 6 changes to Social Security expected in the new year
Exploring: 5 things to do when you hit $50,000 in savings
An ABLE account is a tax-advantaged savings account in which donations can be made to meet eligible disability costs for the owner or designated beneficiary, according to the Social Security Administration. Depending on your account balance, amounts in your account do not count toward the asset limits that affect your eligibility for SSI, Medicaid, and other safety net programs.
SSI benefits are provided to Social Security beneficiaries who cannot cover basic living expenses with a regular Social Security check. This program is overseen by her SSA and provides monthly payments to disabled or blind adults and children whose income and financial resources are below certain financial limits. SSI payments will also be made to non-disabled persons age 65 and older who meet financial eligibility.
To qualify for an SSI, you must meet certain income and wealth standards. This includes money in savings and investment accounts. However, money in your ABLE account (including up to $100,000) does not count as a resource under SSI rules.
An ABLE account allows you to invest your money and protect your earnings from taxes. Withdrawals are tax-free as long as the money is spent on approved expenses related to your state.
With some exceptions, you must have SSI or Social Security Disability Insurance benefits based on blindness or disability that began before age 26 to open an ABLE account. According to AARP, if you meet the SSA definition and criteria for disability and can obtain a disability certificate from your doctor confirming your condition, he may still be able to open an ABLE account.
People with disabilities can only have one ABLE account, but anyone can contribute to an account. According to AARP, the maximum contribution for 2023 is $17,000. Those who are able to work are allowed to contribute additional amounts up to their annual gross salary or individual federal poverty level. For individuals, her FPL in 2023 is $13,590. In some states, contributions are deductible from state income taxes.
ABLE accounts typically have 5-6 investment options. By law, you can only change your investment allocation method twice a year. As of January 2023, accounts are available in all states except Idaho, North Dakota, South Dakota and Wisconsin.
Most ABLE programs only require proof that you are disabled and eligible to open an account. This means that you generally do not need to submit medical records or certificates to open an ABLE account. However, if required to meet disability certification requirements, certification must be made available to the IRS or ABLE programs. Account holders must recertify annually.
Take our survey: Do you think you can retire at 65?
Final Reminder: These Social Security Changes Will Take Effect In 2023
For more information on the ABLE program, visit SSA’s ABLE spotlight page.
Learn more about GOBankingRates
This article originally appeared on GOBankingRates.com.
