The Benefits of Opening an ABLE Account
Last updated: October 2023
Financial planning can be a daunting task for anyone, but for individuals with disabilities, such as spinal muscular atrophy, and their families, it comes with an added layer of complexity. The disability community often faces unique challenges when it comes to maintaining benefits while striving for financial security.
Financial tool for people with disabilities
However, there is a powerful tool available that can help overcome these hurdles and pave the way toward a brighter future: the ABLE account. I have done the financial dance between medical insurance, SSI, and more and I began to feel stuck as I knew there had to be a way to receive the benefits I needed while still saving money. I discovered the ABLE account as a game-changing solution!
The struggle of financial planning
As a disabled mother with a husband and two sons, one of whom is also disabled, I was no stranger to the challenges that arise when navigating the intersection of finances and disability. Many government assistance programs impose strict asset and income limits, making it difficult for individuals with disabilities to save and invest without jeopardizing their benefits. This Catch-22 situation often leaves families in a constant state of uncertainty, unable to plan for the future or meet their long-term financial goals.
Fortunately, there is a solution that can provide newfound financial independence and peace of mind: the Achieving a Better Life Experience (ABLE) account. An ABLE account is a tax-advantaged savings and investment account specifically designed for individuals with disabilities. It helps eligible individuals to save and invest without affecting their eligibility for crucial benefits such as Supplemental Security Income (SSI) and Medicaid.
I have spent hours speaking with ABLE account representatives, financial advisors, and even state program representatives.
Benefits of an ABLE account
Below are the three basic areas that I found extremely helpful regarding ABLE accounts:
Asset Thresholds: ABLE accounts allow individuals to save and invest up to a certain limit (currently $100,000 in most states) without risking their eligibility for benefits. This threshold provides a much-needed opportunity for individuals with disabilities and their families to build a safety net and plan for the future.
Tax Advantages: Contributions made to ABLE accounts are not tax-deductible, but the earnings grow tax-free. Additionally, withdrawals for qualified disability expenses, such as education, housing, transportation, healthcare, and assistive technology, are also tax-free. These tax advantages make ABLE accounts a powerful tool for long-term financial planning.
Flexibility and Control: ABLE account owners have control over how the funds are used, providing a sense of autonomy and empowerment. This flexibility allows individuals with disabilities to meet their unique needs and pursue their goals, whether it's saving for education, homeownership, or enhancing their quality of life.
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Pathway to financial independence
Having personally experienced the repercussions of not being aware of ABLE accounts, I wholeheartedly recommend exploring this financial tool to anyone in the disability community. Opening an ABLE account can provide a pathway to financial stability and independence, allowing individuals with disabilities to plan for the future while maintaining essential benefits.
Navigating the intricate parts of financial planning as a person with disabilities can be overwhelming. I have personally found so many benefits to opening an ABLE account. These accounts offer the disability community an opportunity to save, invest, and grow their financial resources without sacrificing vital benefits. By opening an ABLE account, you take a significant step towards financial empowerment, ensuring a better life experience for yourself and your loved ones.
I will say ABLE accounts offer so many advantages but consulting a financial advisor or disability advocate to understand the specific regulations and eligibility criteria in your state is vital to fully understanding all areas of these accounts.
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