The New York Times recently featured a story on ways families can save for disability-related expenses. The article highlighted the use of ABLE programs made possible through the Achieving a Better Life Experience (ABLE) Act signed by President Obama and became law on Dec. 19, 2014.
The ABLE Act is built on the foundation of the current 529 Education Savings Plans that help families save for college The National Disability Institute estimates there are 58 million individuals with disabilities in the United States. Some but not all of these individuals will qualify for an ABLE account. ABLE programs must now be implemented on the state level.
The ABLE program allows for families to create tax-free savings accounts for lifetime care of individuals with disabilities. The signing culminated an eight-year campaign to gain approval for tax-free savings accounts to help individuals and families finance their long-term disability needs.
The article included tips for savings and highlighted ABLE accounts:
“The 529A accounts are likely to be most attractive for disabled people who work and want to save more than $2,000, or for families who need a place to deposit gifts or inheritances from family members.”
Virginia, Louisiana and Massachusetts have already enacted legislation and West Virginia and Utah have passed ABLE in both state chambers. Additional states with pending legislation include the following: Alabama, Arkansas, California, Connecticut, Florida, Hawaii, Iowa, Illinois, Kansas, Kentucky, Maryland, Minnesota, Missouri, Montana, North Dakota, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont and Washington.
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