Those with Disabilities Can Save More with ABLE Account
Unfortunately, those living with a disability tend to incur significant extra costs for their special living needs such as healthcare, housing, food, and any special assistance necessary. In 2014 the Achieving a Better Life Experience(ABLE) Act was signed, thus ABLE accounts were created for those individuals and their families to contribute to a tax-advantage saving account to fund disability expenses. This also holds true for Supplemental Security Income (SSI) beneficiaries that need the financial support for paying these disability expenses.
Do I qualify for an ABLE account?
The ABLE National Resource Center (ABLE NRC) explains The ABLE Act says to be eligible for an ABLE account you must be 26 years of age; however, the disabling condition must have occurred before your 26th birthday. Although you can only have one ABLE account if you are disabled, anyone is able to contribute to your funds.
It is required that you receive SSI or Social Security Disability Insurance (SSDI) to open an ABLE account. However, if you are 26 years old and are not collecting SSI or SSDI you may still be eligible for an ABLE account if you can prove your condition with medical records from your doctor in order to meet the Social Security Administration (SSA)’s disability definitions.
The AARP announced that the maximum contribution for 2023 is $17,000 annually. To account for inflation rates, this year that is $1,000 more than the limit was in 2022. You might even be able to add more money to your ABLE account if you have a job and your employer is not contributing to a retirement plan. States have set limitations on the total allowable amount of ABLE savings. This is dependent upon the individual state and their set limit for education related 529 savings accounts, which range from $235,000 to $550,000.
Advantages of an ABLE account for people with a disability:
- They are still eligible for government assistance
- They can save for the future
- There is more freedom of choice and control for the beneficiary and family
- There is little to no cost to set up this account
- Investment income earned on ABLE accounts are not taxed
- Up to $100,000 in an ABLE account won’t impact your SSI eligibility
- ABLE account enrollment is easily done online
- They can have an ABLE account in addition to other trusts and accounts
- Regardless of where you live, you may enroll in an ABLE account in any state (currently 46 states offer ABLE accounts)
Opening an ABLE account that is right for you can help you on the path to financial independence. At the end of 2022, there were an estimated 134,000 ABLE accounts with more than $1.18 billion in assets, according to ISS Market Intelligence, a financial research and analytics firm.
These tax-free accounts really allow people with disabilities to save extra money without jeopardizing their SSI benefits. Eventually in 2026, an estimated six million more people, including about one million military veterans, will qualify for the tax-favored accounts, advocates for disabled people say.
Learn more about ABLE accounts and find out how you can enroll. Visit the ABLE National Resource Center (ABLE NRC).
Contact Lowery Law Group at info@lowerylegal.com or call (843) 991-0733. There is no fee for a free consultation regarding your claim. Lowery Law Group is experienced in handling cases in South Carolina as well as Georgia.