ABLE (Achieving a Better Life Experience) Accounts May Assist Families in Financial Planning for the Care of Loved Ones With Disabilities

When President Obama signed the ABLE (Achieving a Better Life Experience) Act in December, 2014, he paved the way for individuals with disabilities to open tax-free savings accounts that can accrue up to $100,000 without losing their government benefits such as Social Security or Medicaid. Funds from the ABLE savings accounts can be used to pay for education, health care, transportation, housing and other expenses. The ABLE accounts are modeled after 529 college savings plans and will also be called 529A accounts. Interest on ABLE or 529A savings accounts will be tax-free. To be eligible, individuals must have a condition that occurred before the age of 26.  Each person may only open one ABLE account.

An article written by Tara Siegel Bernard appeared in the New York Times on March 27, 2015, entitled “Tips for the Future Care of Disabled Family Members,” and discusses ABLE accounts and other means of planning for the financial security of a loved one with a disability.