The Risk-Free Way To Save Money if You are Disabled
(RepublicanDaily) – Achieving a Better Life Experience (ABLE) is a special savings account used by people living with disabilities to save and invest money tax-free. The ABLE Act became law in December 2014 and aims to provide tax-free savings accounts for eligible disability expenses. This assists Americans with disabilities and their families in saving money for future spending (such as college) while maintaining their insurance coverage and government benefits.
ABLE Accounts (also known as 529As) are essential for families caring for disabled individuals. The annual contribution limit is $16,000 as of 2022, but one could contribute more if they are working. However, their account balance must not exceed $100,000 in total because it will affect Supplemental Security Income (SSI).
ABLE accounts intend to supplement, rather than replace, benefits provided by Medicaid, private insurance, SSI, jobs, and other sources.
Who Qualifies for a 529 ABLE Account?
Qualifications may vary slightly across different states, but one must meet the following criteria to open a 529 ABLE account:
- They must be a person who developed a disability before the age of 26
- They must be eligible for disability benefits like Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI)
- They must have a disability certification that includes a physician-signed official diagnosis
How Does an ABLE Account Holder Benefit From It?
Here are a few ways the ABLE Account can benefit a person:
- A person living with a disability can manage their money in their ABLE account. This enables them to rely less on other people making the whole process easier and more convenient
- Instead of relying on a family member or the court to determine a first-party severely disabled trust, a disabled person can set up an account with their cash
- ABLE accounts allow one’s funds to grow tax-free and exempt the person living with a disability from gift tax regulations
ABLE accounts are simple to set up with many local financial institutions. Visit the ABLE National Resource Center for more information about ABLE program features and how to get started.
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