ABLE Accounts for Veteran Families

ABLE accounts are a relatively new financial tool that can help people with disabilities and their families save money for disability-related expenses. These accounts are designed to provide tax-free savings for individuals with disabilities and their families, and they can be used to pay for a wide range of expenses, including medical care, housing, education, and more.

If you or a loved one is a veteran with a disability, an ABLE account could be a valuable resource. Here's what you need to know.

What is an ABLE account?

An ABLE account is a tax-advantaged savings account that can be used to pay for disability-related expenses. These accounts are similar to 529 college savings accounts, but they are specifically designed for individuals with disabilities. 

Like 529 accounts, ABLE accounts are administered by states, and each state sets its own contribution limits and investment options.

Who is eligible for an ABLE account?

To be eligible for an ABLE account, an individual must have a disability that began before the age of 26. This includes veterans who have a service-related disability. In addition, the individual must be receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits, or must have a disability certification from a physician.

If an individual is not currently receiving SSDI or SSI benefits, they can still open an ABLE account, but they will need to provide a disability certification from a physician.

How do ABLE accounts work?

ABLE accounts are funded with after-tax contributions, and the money in the account grows tax-free. Withdrawals from the account are also tax-free, as long as the money is used for qualified disability-related expenses.

Each state sets its own contribution limits, but in general, individuals can contribute up to $15,000 per year to an ABLE account. Some states allow family and friends to contribute to the account as well.

What expenses can be paid for with an ABLE account?

ABLE accounts can be used to pay for a wide range of disability-related expenses, including:

• Education and training
• Housing and transportation
• Medical and dental care
• Assistive technology and personal support services
• Legal fees
• Basic living expenses, such as food and clothing
• It's important to note that expenses must be related to the individual's disability in order to be considered qualified expenses.

What are the benefits of an ABLE account?

One of the biggest benefits of an ABLE account is that it allows individuals with disabilities to save for their future without jeopardizing their eligibility for government benefits. In the past, individuals with disabilities were limited in how much they could save, and any money over a certain amount could cause them to lose their benefits. ABLE accounts provide a way to save for the future while still maintaining eligibility for benefits.

In addition, ABLE accounts offer tax-free savings and withdrawals, which can help individuals and their families save money over time.

To learn more about ABLE accounts, visit: https://www.ablenrc.org/get-started.