Some of the best advice I received when Troy was born was to live in the present; to treat my son like any other baby. Looking too far into the future can be a daunting task for parents with children with disabilities.
Will my son live independently? Will he have a job, and be a contributing member of society? Will he have friends and be happy? It may seem easier to ignore these thoughts, but thinking constructively about your child’s future has its rewards.
The Achieve a Better Life Act (ABLE) is one way to control your child’s future success today. ABLE accounts are tax-advantage savings accounts, similar to a 529 college savings account but you can save for so much more than just college.
“ABLE accounts give people with disabilities the potential to significantly increase their independence and quality of life, without jeopardizing benefits such as Medicaid and Supplemental Security Income (SSI),” explains Heather Sachs, Senior ABLE Advisor at the ABLE National Resource Center.
Before ABLE passed, individuals who received disability benefits could only have $2,000 to their name. “This was just so wrong. People with disabilities were forced into a life of poverty and dependence on government,” Sachs said recently at a workshop on ABLE at the National Down Syndrome Congress Conference in Sacramento.
Now, with an ABLE account people with disabilities can save up to $100,000 dollars total without losing their SSI or Medicaid benefits. We opened Troy’s ABLE account this past spring. You can read about it here. I soon realized this is not just a college savings account, and with looming threats to cut Medicaid it may end up supplementing needed government supports.
Troy and other ABLE account holders can use their savings at any age on ANYTHING that will improve their independence, health and wellness. This includes private therapies, medical equipment, assistive technology, school expenses, employment related costs, transportation, and housing just to name a few.
“The list of eligible expenses is defined very broadly,” explains Sachs. This means Troy could use his ABLE account for an iPad to play his favorite Starfall phonics game. An adult beneficiary could buy an iPhone (assistive technology) to call Uber (transportation) to get to ballroom dance lessons (wellness), and their ABLE account would pay for it all. “There’s no preapproval necessary for these purchases, but keep your receipts in case you’re ever audited,” Sachs says.
ABLE Accounts have a $14,000 a year contribution limit, and 48 states already have ABLE plans. You can compare state plans here. Shop around for the best plan, because most states allow non-residents to sign up.
We went with Tennessee’s ABLE plan (even though we have no connection to the state), because their is no initial or annual cost.
Even though roughly 10 million Americans could benefit from an ABLE account, only 10,000 accounts have been opened since the first program started in 2016. So, why aren’t more people taking advantage of this tax-advantage savings accounts? “In a few words: lack of information and skepticism,” says Sachs.
Now the ABLE National Resource Center (ANRC) wants to change that with an awareness campaign starting the month of August. You can sign up for weekly ABLE informational webinars (every Wednesday in August) here.
Check back next week, when we bust the myths surrounding ABLE accounts.
OMGsh, yes, this!! Thank you, Courtney! My initial understanding of these accounts was not that the funds could be used for just about anything, and my hesitation to open one had to do with this and the Medicaid payback. It makes sense now and is definitely a more appropriate circumstance. I did try to evaluate and compare options for Able accounts at one point, too, but the amount of information was so overwhelming that I put it on the back burner. I’m looking forward to using this resource and to watching the webinars to learn more, and hopefully get an account opened sooner rather than later. Thanks again!
Hi Sandy! You may want to sign up for the ABLE webinar. They’ll give you tips on comparing programs. Also, http://www.ablenrc.org is planning on posting an easier comparing tool in the future, because it is overwhelming. It took me several days of really researching to find TN, but I think a lot of people don’t even realize they can look at other states. The only bad side of Tennessee’s program is that they don’t have a debit card yet (because it costs money)…they will likely get one in the future, and for us it’s no big deal because I plan to save for Troy’s adulthood. I’m glad you found this useful!