ABLE accounts are a 529 account with all kinds of bells and whistles built specifically to serve disabled Americans.
Why Open an ABLE Account?
If you are theparent of a disabled child, their future in higher education may be unclear.
The SSI resource limit is $3,000 for couples.
No Interest Til Almost 2027?
Other Income-Based Public Benefits
SSI is not the only means-tested public benefits program.
Many states may have an asset limit associated with Medical Assistance or Medicare access when youre disabled.
There are various other benefits you may need to access that come with asset tests, too.
ABLE accounts solve this problem across many programs.
The first $100,000 you have saved in an ABLE account cannot be counted for SSI benefits.
Tax Advantages
ABLE accounts can function as tax-advantaged savings accounts or as a vehicle for investing.
Did you know?
Through 2025, you might count contributions towards the Savers Credit in this instance.
Unless there is further legislation, this tax advantage will disappear after 2025.
While the federal government doesnt give you much credit for ABLE contributions, some states do.
What Are Qualified Disability Expenses?
ABLE accounts are different.
Who Can Open an ABLE Account?
In addition, 25% of American adults become disabled between age 20 and traditional retirement age.
The fact that more people can open accounts has more downstream effects than just altruism.
Many states had private companies set up their ABLE account programs over the past several years with private funds.
To recoup the costs of setting up and managing these plans, there are fees associated with ABLE accounts.
These fees vary by state.
Hanley notes that you might not have to wait until 2026 to see lower fees.
Contribution Limits
The standard annual contribution limit for an ABLE account is $17,000.
Anyone can contribute towards this max the disabled individual, family members, friends, etc.
That makes the maximum total annual contributions $31,580 in most states.
First, many states have passed protective laws limiting when Medicaid can and cant claim any remaining funds.
Even with these state laws, there are still instances where Federal law can compel them to collect.
Hanley said that some though not all states will run a cost-benefit analysis on recuperating these funds.
Technically, the Federal government can require collection in select circumstances.
Hanley said the National Association of State Treasurers (NAST) has a list of legislative priorities.
Most plans have both annual or monthly account maintenance fees as well as investment-related fees, explains Curley.
Be aware of thetotalfees when taking both categories into account.
She is a regular contributor to The Penny Hoarder.
Probably not as good as youd like.
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