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Why is an ABLE account important for kids with disabilities?
It offers families a way to save for disability-related expenses, ensuring the child’s needs are met without compromising essential public benefits.
How does an ABLE account benefit in terms of taxes?
Money saved in an ABLE account grows tax-free, maximizing the funds available for the child’s needs.
Does having an ABLE account affect eligibility for government aid like Medicaid?
No, savings in an ABLE account don’t jeopardize eligibility for Medicaid or other public benefits.
What expenses can be covered by funds in an ABLE account?
ABLE account funds can be used for a range of disability-related expenses, such as education, housing, transportation, healthcare, and assistive technology. It provides flexibility to address various needs.
Understanding how an ABLE account works is crucial for families navigating disability-related finances. Here’s a concise overview and real-world examples of this impactful concept in action.
| Key Points | Description |
|---|---|
| Tax-Advantaged Savings | ABLE accounts offer tax advantages, allowing families to grow savings without affecting eligibility for critical benefits. |
| Qualified Expenses | Funds can be used for various disability-related expenses, from healthcare to education and assistive technology. |
| Individual Control | The account holder retains control, making decisions on fund usage, offering flexibility and independence. |
| Contributions | Family and friends can contribute within annual limits without impacting the account owner’s benefits. |
| Investment Options | ABLE accounts often provide investment choices, allowing funds to potentially grow over time. |
In essence, ABLE accounts provide a dynamic financial tool, fostering independence while safeguarding eligibility for essential support services.
This post was originally published on Sept. 1, 2023. It was updated on April 12, 2024.
