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ABLE Accounts: Expanded Eligibility and What It Means for You
ABLE accounts,designed to empower individuals with disabilities and their families,have recently undergone a significant change: the eligibility age has been expanded to include those up to age 46. This update broadens access to these valuable financial planning tools, offering more people the opportunity to save for disability-related expenses without jeopardizing essential benefits.
What are ABLE Accounts?
ABLE (Achieving a Better Life Experience) accounts are tax-advantaged savings accounts for individuals with disabilities. They allow eligible individuals to save up to $18,000 per year (as of 2024) without affecting their eligibility for Supplemental Security Income (SSI), Medicaid, and other needs-based government benefits. These accounts can be used to pay for qualified disability expenses, including education, housing, transportation, healthcare, and more.
The recent Change: Raising the Age Limit
Previously, ABLE account eligibility was limited to individuals with disabilities who were diagnosed before age 26. The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, signed into law in December 2022, raised the age limit to 46. This change, effective immediately, means that millions more Americans with disabilities now qualify for ABLE accounts. Source: Social Security Management
Who is Now Eligible for an ABLE Account?
To be eligible for an ABLE account, an individual must meet the following criteria:
- Be diagnosed with a qualifying disability. This generally means having a medically determinable physical or mental impairment that substantially limits one or more major life activities.
- The disability must have originated before age 46.
- Be eligible for, or designated as the beneficiary of someone eligible for, SSI or SSDI. Individuals who do not meet these requirements can still qualify if they obtain a certification from a physician confirming their disability.
What can ABLE Accounts Be Used For?
ABLE accounts offer flexibility in how funds are used. Qualified disability expenses include, but are not limited to:
- Education
- Housing
- Transportation
- Healthcare
- Employment training and support
- assistive technology
- Oversight and administrative fees
- Personal support services
It’s critically important to note that funds used for expenses that are not considered qualified disability expenses might potentially be subject to taxes and penalties.
How to Open an ABLE account
opening an ABLE account is a straightforward process. Each state offers its own ABLE programme, and you can choose the program that best suits your needs. Here’s a general overview:
- Research State Programs: visit the ABLE National Resource Center (https://www.ablenrc.org/) to compare programs offered by different states.
- Meet Eligibility Requirements: Ensure you meet the eligibility criteria for the chosen program.
- Complete the Application: Each program has its own application process, typically available online.
- Fund the Account: You can contribute to the account through various methods, such as electronic funds transfer, payroll deduction, or check.
Key Takeaways
- The ABLE account eligibility age has been raised to 46.
- ABLE accounts allow individuals with disabilities to save for qualified expenses without impacting benefits.
- Funds can be used for a wide range of disability-related needs.
- Each state offers its own ABLE program; research to find the best fit.
frequently Asked Questions (FAQ)
Q: Will opening an ABLE account affect my current benefits?
A: No, ABLE accounts are designed to not impact eligibility for SSI, Medicaid, and other needs-based benefits, as long as the funds are used for qualified disability expenses.
Q: What happens to the funds in my ABLE account if I become ineligible?
A: If you become ineligible for an ABLE account (e.g., due to a change in disability status), you may be able to roll the funds over into another qualifying account, such as a 5
