Managing finances can be challenging, and individuals with disabilities often face unique financial needs. There’s a financial tool available called an ABLE account that can help make life a little easier. In this article, we’ll explain what ABLE accounts are and how they can empower people with disabilities to take control of their financial future.
What are ABLE accounts?
An ABLE account, which stands for Achieving a Better Life Experience, is a type of savings account created specifically for individuals with disabilities. The purpose of an ABLE account is to help people with disabilities save money without jeopardizing their eligibility for important government benefits, such as Medicaid and Supplemental Security Income (SSI).
Why are ABLE accounts important?
ABLE accounts offer several benefits that can help improve the lives of individuals with disabilities:
- Preserving benefits: One of the main advantages of an ABLE account is that it allows people to save money while still qualifying for government programs like Medicaid and SSI. With an ABLE account, you can accumulate savings without the fear of losing these critical benefits.
- Tax advantages: ABLE accounts come with tax benefits that can help savings grow faster. Although contributions to an ABLE account are not tax-deductible, the money in the account grows tax-free. Withdrawals made for qualified disability expenses are tax-free as well. This means you can save more money over time and use it for important disability-related expenses without worrying about paying taxes on the earnings.
- Flexibility and control: ABLE accounts offer people greater control over their financial resources. They can decide how to use the money saved in their ABLE account to meet their specific needs. Whether it’s for healthcare, housing, education, transportation, assistive technology, or other disability-related expenses, the account holder has the autonomy to allocate funds as they see fit.
- Supplementing other financial tools: ABLE accounts can work together with other financial tools, such as special needs trusts (SNTs), which are designed to protect assets while allowing people with disabilities to maintain eligibility for government benefits. By combining an ABLE account with an SNT, people can have even more flexibility and options for managing their finances effectively.
- Community support: Opening an ABLE account means becoming part of a supportive community. Account holders have access to resources, educational materials and tools that can help them make informed financial decisions. Furthermore, family, friends, and other supporters can contribute to the account, providing a network of financial support and strengthening social connections.
ABLE accounts are a valuable financial tool that can help people with disabilities to take charge of their financial future. If you or someone you know has a disability, it’s worth considering an ABLE account as a means to secure a brighter financial future.
If you’re interested in more information, set up a time to come talk to us and we can provide you with research, resources and basic information on eligibility and the process.
