ABLE Savings Accounts

Here at Indiana MoneyWise, Kylee Hale and I have an online comic we enjoy. It's called The Awkward Yeti, and it often features the (financial) adventures of Heart and Brain. In one of their more touching comics, Heart consoles Brain by saying "It's okay not to have all the answers. Super okay." But you know what's really awesome? Knowing people who DO have the answers! This is my roundabout way of saying we have a guest post this week. In our continuing series on the subject of disabilites and finances, I reached out to our friends at the Indiana State Treasurer's office to ask if they would provide us with more information about ABLE savings accounts. Here's their post.

There is no question that living with a disability can come with increased financial challenges. Having to pay more for expenses related to additional medical needs, adaptive equipment, and personal support services – just to name a few- results not only in an increased financial burden but can also make it difficult to save money. Additionally, if an individual is receiving benefits such as SSI or Medicaid, they are limited to how much they can have in savings.

In a recent post you were briefly introduced to ABLE accounts and what they can mean for people with disabilities. ABLE accounts are probably the most significant advancement for people with disabilities since the Americans with Disabilities Act and advance its purpose by allowing individuals to save money without losing vital public benefits. They offer the opportunity of increased financial independence and empowerment.

Eligibility

To be eligible for an ABLE account one must have the onset of disability or blindness prior to age 26 and be receiving SSI or SSDI. If they are not receiving SSI or SSDI they may still be eligible for an account if they have a doctor’s diagnosis of significant functional impairment. Either the eligible Individual can open the account on their own, or an Authorized Individual (parent, guardian or Power of Attorney) can open one on their behalf. There is only one account allowed per person and anyone can contribute to the account.

Up to $15,000 per year can be contributed (individuals who work can contribute more) and if they are receiving SSI they can save up to $100,000 total. If they are not receiving SSI they can save even more.

In 2017 Indiana proudly launched its own ABLE plan, INvestABLE Indiana. Since its inception, INvestABLE Indiana has been providing eligible Hoosier account owners the ability to save well beyond what is typically a $2,000 resource limit for many benefits, with a current average account balance of over $6,000.

Options

The Plan offers a variety of savings and investment options, ranging from more conservative to more aggressive options. Depending on one’s risk tolerance they can diversify their investments and even have access to a fully FDIC insured checking option with a debit card. You can learn more here.

Contributions and earnings in an INvestABLE Indiana account are not subject to federal or state income tax if spent on qualified expenses, similar to a 529 college savings account. Contributions are made with post-tax dollars.

Qualified Expenses

The money in an ABLE account has rather flexible usage in that a qualified expense is anything that can be connected to living with a disability and can improve one’s health, wellness or quality of life. INvestABLE Indiana participants are using their ABLE accounts to save for things such as a down payment on a home, an accessible vehicle, educational costs, and extra therapies or services not covered by current benefits.  The expense does not have to be a medical necessity and does not have to be for the sole benefit of the beneficiary. You can learn more about the benefits and usage of an ABLE account here.

The motivation behind the ABLE Act and Indiana’s own INvestABLE savings plan is to allow people with disabilities the ability to save as much as possible without losing access to their benefits, and ultimately providing the opportunity for a better life experience.

The above post was written by Amy Corbin, who is the Executive Director at Indiana ABLE Authority. Amy encourages you to contact her if you'd like more information about ABLE accounts or want to schedule a presentation on the subject. You can reach Amy by calling 317-232-1614 or email her at ACorbin@tos.IN.gov.