The Power of ABLE Accounts for Your Child’s Future

In our journey through parenthood, we’ve traveled far and wide to support our child’s development. We’ve invested our time, love, and a small fortune in psychologists, speech therapists, occupational therapists, and applied behavior analysis (ABA) therapists. We’ve even explored alternative therapies, spending summers experimenting with probiotics, vitamins, melatonin, fish oil, magnesium, and bone broth. We’ve given it our all because we believe in our child’s potential and well-being.

But the journey doesn’t end here. As parents, we understand that the road ahead is long and often challenging. The financial aspect of caring for a child with special needs is one of those challenges. Thankfully, there’s a ray of hope from the Achieving a Better Life Experience (ABLE) Act of 2013. This landmark legislation passed on December 19, 2014, brings with it the promise of some financial independence for individuals with disabilities.

Today, we’ll delve into ABLE accounts, exploring what they are, how they work, and how they can contribute to your child’s independence. If you have a son or daughter diagnosed with autism before age 26, this might be just what you’ve been searching for.

The ABLE Account
The primary purpose of the ABLE Act is to allow eligible individuals to have a tax-advantaged savings account without jeopardizing public benefits such as Supplemental Security Income (SSI). It’s a game-changer for families like ours, seeking ways to secure a brighter future for our children while navigating the complex terrain of disability-related expenses and public benefits.

Eligibility and Contribution Limits
Before we dive into the intricacies of ABLE accounts, it’s essential to know who’s eligible. If your son or daughter was diagnosed with autism before age 26, they should be eligible to open an ABLE account. This eligibility criterion opens up a world of possibilities for many families who have faced financial uncertainty while caring for their loved ones with disabilities.

Now, let’s talk numbers. The IRS determines the annual amount that can be deposited into an ABLE account. As of January 2023, the maximum annual contribution amount was $17,000. However, it’s important to note that the total contribution limit may vary from state to state. According to the current IRS guidelines, the first $100,000 in an ABLE account is exempt from the SSI $2,000 resource limit. To get a clearer picture of the contribution limits in your state, refer to a tax professional or an elder attorney.

How to Utilize an ABLE Account
So, you have an ABLE account, and you’re wondering how to make the most of it. The possibilities are vast, limited only by the disability-related expenses not covered by earned income and programs such as SSI and Medicaid. These expenses could include employment training, assistive technology, preventive medicine, financial management, personal support services, and legal fees. It’s a comprehensive toolkit designed to enhance the quality of life and independence of individuals with disabilities.

Enrolling in an ABLE Account
Most states offer ABLE accounts to eligible individuals, and many accept out-of-state residents. Similar to the 529 college savings plan, the funds in an ABLE account can be invested using various strategies, ranging from low risk to high risk. The choice of investment strategy should align with the individual’s needs and goals. If navigating your child’s financial needs feels like uncharted territory, seeking the guidance of a financial planner is a wise move. They can help you make informed decisions and create a tailored plan for your family’s unique circumstances.

One of the standout features of ABLE accounts is their flexibility. Family members, friends, and the account owner can contribute to the account, making it a collaborative effort to secure a brighter financial future. Furthermore, the funds in an ABLE account can be easily accessed using a debit card, ensuring that the money is readily available when needed.

A Tool for Financial Independence
As parents, we often grapple with the daunting task of ensuring our children’s well-being, even as we age. It’s a responsibility that never truly fades. In this journey, an ABLE account can be a powerful tool. It not only eases some of the financial burden but also empowers individuals with disabilities to take charge of their financial future.

The newfound freedom with an ABLE account isn’t just about financial independence; it’s a source of dignity and enhanced self-reliance. It’s a step towards breaking down barriers and enabling individuals with disabilities to lead fulfilling lives on their terms.

An ABLE account is an option worth exploring as we navigate the winding road of parenthood. It’s a tool that can pave the way for your child’s financial independence, ensuring their future is filled with opportunities, not limitations. So, take that step forward, secure your child’s financial future, and embrace the hope that comes with it. Together, we can empower our loved ones with disabilities to achieve their dreams and aspirations, whether big or small.