An ABLE account (Attainable Savings Plan) is a tax free account that lets families set aside up to $14,000 a year for an array of expenses ranging from health care to education, without losing federal disability benefits. ABLE accounts will allow people with disabilities to accumulate up to $100,000 without jeopardizing Medicaid coverage or other government-funded services. In the past, a person with disabilities could have no more than $2,000 in assets to qualify for federal benefits. ABLE accounts will not only help parents save money for children, but also will eliminate a kind of enforced poverty for millions of people with disabilities.
Individuals are eligible for an ABLE account if they are already receiving benefits under Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI). If not, they may still be eligible if they certify that they are blind or disabled and have a written diagnosis of their condition by a licensed physician. Under all circumstances, the onset of the disability must have begun prior to age 26. In Massachusetts, the program will be run by the nonprofit Massachusetts Educational Financial Authority with Fidelity Investments managing the money.
ABLE accounts will allow you to put money in the ABLE account after taxes and it’s permitted to grow tax-free. The funds are not taxed when they leave the account, so long as they are spent on qualified items, including living expenses. ABLE money can be linked to a cash management account, with check writing, a Fidelity-issued debit card, and then used to pay qualified expenses.
For more information about ABLE accounts click here.
A tax-smart way to save
Earnings in the account grow tax deferred and, when used for qualified disability expenses, are federal income tax-free.
Helps preserve disability benefits
Money in the account does not impact Medicaid benefits and balances below $100,000 do not impact SSI benefits.
A simpler way to plan for the future
Save more easily for disability-related expenses, and access your money whenever you need it.