There are more than a few assistance options that haven’t really gotten as much attention as they deserve, and the Achieving a Better Life Experience program is certainly one of them.
This program was designed with the intent of helping Americans with disabilities, and ever since it was established in 2014, it’s helped people save thousands of dollars every year via a tax-deferred savings account.
Through ABLE, Americans can make yearly contributions to this savings account, up to $16k, which will then help them deal with disability costs in the long run.
We’ve compiled a decent amount of information to get you up to speed on how ABLE works and how you can make use of it, so keep reading and find out more about how you too could save some money in the future.
What is ABLE?
Also known as the 529 A account, ABLE focuses on offering people with disabilities access to a savings account that could possibly help them save money on the expenses they have.
The beneficiary of the account can then use the money that’s been saved up on any of the eligible disability costs, with the Municipal Securities Rulemaking Board being in charge of defining those.
Last year, the yearly limit for ABLE accounts reached $16k, although it can potentially vary, based on which state you’re in, so make sure you’ve done your research before diving into opening an account.
On a side note, both the beneficiary and their immediate family members can make after-tax contributions to the account, and they’re usually not considered to be tax-deductible.
However, some of the states where you can get an ABLE account will allow for state income tax deductions.
How the ABLE accounts are operated
Currently, each state has its own set of regulations for ABLE accounts, although no actual regulation exists about actually opening one, which wasn’t possible a few years ago.
Thankfully, the rule that prevented individuals from opening a 529 A account in a different state expired around 8 years ago in 2015, allowing you to make use of another state’s regulations on ABLE accounts even if your residence isn’t there.
If you’re looking to find out more about these regulations, the best resource may be the ABLE National Resource Center, which will provide you with a map that displays each state’s ABLE programs and where you could apply for an account of your own.
You might also find that certain states offer tax benefits and charge fees, which isn’t the case for some others, so make sure to do a comparison and weigh your options before committing.
Some states may also charge a fee for owning an ABLE account, which is a standard monthly maintenance fee, although this amount is often discounted or waived based on how much the beneficiary has saved up.
Despite it being widely available to disabled Americans, one must still meet certain eligibility requirements in order to open an ABLE account.
This is mainly to ensure that help is offered only to those who actually need it, and in order to be eligible for the program, you must meet at least one of the following requirements.
One of those would be that a person needs to be eligible for SSI based on a disability that they acquired before the age of 26, and this also applies to blindness.
Another requirement is that a person is able to receive CDB, DIB, or DWB on account of a disability/blindness that started before they reached the age of 26.
Finally, you could also be found eligible for an ABLE account if you have verifiable proof that you’ve met the conditions for a disability certification before turning 26.
Regardless of which one of these may qualify you for the ABLE program, you must still provide evidence of the claim you’ve made, and the state you’re applying in will decide which documentation is necessary to complete your application process.
One common thing among all states is having to provide evidence of your disability in order to begin your application for an ABLE savings account.
If you meet any other eligibility requirements though, your age won’t matter, and sometimes, even people under the age of 26 may qualify for the program.
One of the greatest advantages to having an ABLE account is that the first $100k deposited into the account isn’t labeled as one of your personal assets, which is helpful if you’re looking to receive benefits from programs like SSI, Medicaid, and housing assistance.
All of these require you to have less than $2k in financial assets, whereas an ABLE account allows individuals to bypass that restriction.
One thing to note is that you can only have a single ABLE account open at any time, and this applies on a country-wide basis, meaning that you can’t even have an ABLE account in a different state and try to open one on your own.
If the account’s beneficiary passes away, the money stored in the account can be used to cover funeral and burial expenses, after which the state will decide how the beneficiary’s passing will affect the amount stored in the ABLE account.
There are many kinds of ABLE accounts, and if you thoroughly research the subject you’ll find that there are actually 49 variations nationwide, and it’ll be up to you to find the one that best fits your current circumstances.