ABLE accounts are a 529 account with all kinds of bells and whistles built specifically to serve disabled Americans.
After years of grassroots advocacy efforts from the disability community, ABLE accounts were birthed into legislation in December 2014. And thanks to legislation passed in late 2022, more people will become eligible for it soon (more on that in a bit).
Why Open an ABLE Account?
529 accounts are traditionally state-sponsored and used to save for your child’s college education. Though you can’t deduct your contribution, the money grows without being taxed and is not taxed when it’s withdrawn for approved college expenses, notably tuition.
If you are the parent of a disabled child, their future in higher education may be unclear. However, an ABLE account allows you to save or invest money for a potential university experience, but the funds can also be used for a myriad of other life expenses.
Outside of saving for college, there are several reasons both disabled individuals or parents of disabled children may want to open an ABLE account.
Asset Tests: Supplemental Security Income and Beyond
When you are disabled, the system can make it difficult to achieve financial independence. For example, in order to gain access to meager amounts of Supplemental Security Income benefits you are only allowed to have $2,000 in assets. The SSI resource limit is $3,000 for couples. Assets can include the value of your bank account, second vehicle, life insurance policies, cash on hand and more.
Asset tests
