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The Importance of ABLE Accounts for People with Disabilities

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According to the New Hampshire University Institute on Disability. approximately 1 million U.S. workers with disabilities have lost their jobs since March 2020. And on top of that people with disabilities may have incurred additional costs due to the pandemic, such as support services, grocery delivery charges, and personal protective equipment.

Fortunately, however ABLE accounts, created through the Achieving a Better Life Experience Act, assist people living with disabilities to save money without losing government benefits.

Well…I’m delighted to welcome back Catherine Collinson, president of nonprofit Transamerica Center for Retirement Studies, and she’s here to explain and discuss the importance of ABLE accounts. So, Catherine, what are they?

Catherine Collinson:

ABLE accounts are tax-advantaged savings accounts to help eligible individuals with disabilities and their families save for disability-related expenses. The good news is that anyone, family or friends, can contribute to an individual’s ABLE account. Additionally, contributions may be eligible for the Saver’s Credit, an IRS tax credit. One caveat is that the total annual contributions into an individual’s account is $15,000 each tax year.

Al Waller:

I’d also like to point out to our listeners that prior to the creation of ABLE accounts, disabled Americans risked losing government benefits any time they had more than $2,000 in savings in their own name.

Now Catherine, I think you mentioned funds in ABLE accounts can be used to pay for disability-related expenses? So, would this mean that the money can only be spent within specific--parameters?

Catherine Collinson:

Yes, however, the definition of “disability expenses” is quite broad, according to the ABLE National Resource Center. For example, individuals can spend their ABLE account funds on expenses ranging from education, housing, transportation, and other expenses that help improve their health, independence, or quality of life.

Al Waller:

Well then… Who is eligible and should be taking advantage of the ABLE account?

Catherine Collinson:

Currently, individuals who became disabled before their 26th birthday are eligible for an ABLE account. Additional eligibility requirements can be found on the IRS and the ABLE National Resource Center websites. Some proponents are working to raise that age to 46, which would broaden the benefit to many more Americans.

Al Waller:

So, then how does one go about signing up for an ABLE account?

Catherine Collinson:

Most states have their own ABLE account program; however, many permit non-residents to open accounts. Maryland’s program can be found at MarylandAble.org.

Al Waller:

That’s good to know and just to repeat the ABLE website program for Maryland can be located at: MarylandAble.org. (no abbreviations-both words spelled out). As noted, ABLE accounts can really help many Americans with disabilities save for their future without risking the loss of governmental benefits….and I think that’s a positive note to leave things here.

Well Catherine as always, it’s been a great pleasure having you with us today. And again, thank you for your valuable and critical research. You’ve been tuned to another edition of ClearPath – Your Roadmap to Health & Wealth. This is Al Waller on WYPR, your NPR news station. Stay safe & thanks for listening.
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ClearPath – Your Roadmap to Health & Wealth is paid for by Transamerica Institute.

Al Waller is a long time native of the Baltimore area. He entered the field of Human Resources Management starting as an HR Generalist with PwC (Pricewaterhouse-Coopers). This marked the beginning of a 30 year career that advanced into the management level for locally and globally based corporations. His primary area of expertise has focused on but not limited to: Talent Acquisition /Retention, Employee Relations as well as Training & Development.