Living with a disability brings many daily considerations that a person must prioritize. Too often people place financial planning toward the bottom of the list when considering long-term or short-term needs. A multitude of reasons can cause this, including the intimidating and challenging nature of financial planning due to a person’s limited resources or knowledge of options. For people with a disability, saving money for the future is especially daunting because of concerns about losing needed benefits such as Medicaid.
Protecting vital benefits while saving
For many years now, people have had the option of using a Special Needs Trust to save money. A Special Needs Trust is a way of saving money which does not count when determining eligibility for public benefits. But in 2014 legislators recognized ABLE accounts, and Indiana launched its own ABLE savings program, INvestABLE Indiana. A person can save money in an ABLE account without losing vital means-tested benefits such as SSI or Medicaid. Additionally, their money saved in the ABLE account grows and they can withdraw it tax-free, as long as the account owner uses withdrawals for “Qualified Disability Expenses.”
An individual must have a disability onset before the age of 26 and hold entitlement to SSI or SSDI to qualify for an ABLE account. If they don’t receive benefits but meet the age of onset criteria, they need a doctor’s diagnosis of a significant functional impairment or have a disability from the Social Security’s List of Compassionate Allowances. The ABLE Age Adjustment Act, passed by Congress last year, will raise the age criteria to 46 starting in 2026.
An eligible individual can open and manage their own account, and if they can’t, an authorized individual can act on their behalf. Any of the following individuals in hierarchical order—Power of Attorney, guardian, spouse, parent, sibling, grandparent, Social Security Representative Payee—can serve as an authorized individual if they agree and can act on behalf of the Account Owner.
Improving health with qualified benefits
The account owner can use the wide range of qualified expenses from an ABLE account to live their best life and meet their unique needs. Specifically, the account owner can spend funds from an ABLE account on anything that improves their health, independence, or quality of life as it relates to living with their disability—even basic living expenses. Also, paying for housing expenses from an ABLE account won’t reduce SSI benefits.
When saving in an ABLE account, a person can contribute up to $17,000 annually. Account owners who receive SSI benefits must maintain their account balance under $100,000, while those who do not receive SSI benefits can save up to $450,000 with INvestABLE Indiana.
Accessing options for account owners
INvestABLE Indiana allows individuals to access their account online or by phone whenever they need it, and it imposes no limits on withdrawals. INvestABLE account owners can also choose from six different investment options as well as an interest-bearing checking account, which includes a debit card. Starting an account requires only $25, and anyone can contribute.
ABLE accounts offer individuals with disabilities a life-changing opportunity to save and plan. They enable financial empowerment and autonomy, which were previously unreachable. Now, saving and planning don’t have to languish at the bottom of the list, and it’s never too early to start.
To learn more and enroll in INvestABLE Indiana please visit https://in.savewithable.com or call at (888) 609-3457.