Looking to Create an ABLE Account? These Are the Resources You Need

Undoubtedly, ABLE (or “Achieving a Better Life Experience”) accounts have been a significant breakthrough for individuals with disabilities. For those on public benefits, such as Supplemental Security Income (SSI) or Medicaid, an individual must not have personal financial assets greater than $2,000, at any given time. But with the creation of the ABLE account, individuals can move funds to not only protect their eligibility but also enable them to save or invest toward future financial needs not covered by their government benefits. While the ABLE account does not replace thorough estate planning for the individual or family, it is an important step toward greater financial independence.

In December 2014, Congress passed legislation creating the 529A “ABLE” account. Many great ABLE solutions have been developed since then, including platforms run by individual states and national alliances. In addition, we saw the creation of the ABLE National Resource Center, which provides thorough and valuable information for those looking to make decisions regarding opening ABLE accounts, including costs, eligibility, investment options and potential tax benefits. We encourage anyone interested in the ABLE program to visit the National Resource Center for additional details pertaining to their state.

One ABLE account platform that has instituted many best practices and has been popular within the special needs community is the STABLE Account, created by the state of Ohio. The STABLE Account platform has a few important features that have made it popular, including:

— Nationwide eligibility, meaning residents of states other than Ohio can apply.

— Low costs of $2.50 to $3.50 per month for administrative expenses, in addition to an asset-based fee of between 0.19% and 0.33% for residents of Ohio and partner states of Arizona, Georgia, Kentucky, Missouri, New Hampshire, New Mexico, Oklahoma, South Carolina, Vermont, West Virginia and Wyoming (residents of all other states have an asset-based fee of 0.45% to 0.59%).

— Diversified, index-based investment options through Vanguard Lifestyle funds.

— The STABLE Card, which is a loadable, prepaid debit card, featuring a comprehensive spending tracker portal to assist in qualifying expense record-keeping.

It is important to note that many ABLE platforms around the country offer similar pricing and features. A comparable program is the National ABLE Alliance, which serves as the platform for the following states: Alaska, Colorado, Illinois, Iowa, Indiana, Kansas, Minnesota, Montana, Nevada, North Carolina, Pennsylvania, Rhode Island and the District of Columbia.

In addition to some of the helpful features that these account platforms have provided, many states offer tax deductions for contributions to ABLE accounts. In the state of Wisconsin, any amount contributed is eligible for a state tax deduction for the account owner or any other person who contributes. (However, the deduction does not apply to rollovers into the account from former 529 plan assets.1)

It’s important to reiterate that we typically see ABLE accounts as helpful complements to thorough estate planning for individuals with disabilities and their families, including special needs trusts. For help determining if an ABLE account makes sense for you or a loved one, contact Ryan McGuire at rmcguire@wipflifinancial.com or 608-661-2665.

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services and fees is set forth in Wipfli Financial’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Ryan McGuire
Ryan McGuire

CFP®, ChSNC® | Financial Advisor

Ryan McGuire, CFP®, ChSNC®, is a Financial Advisor for Wipfli Financial Advisors in Madison, WI. Ryan specializes in retirement distribution planning, Social Security planning and financial planning for families with special needs.

No Comments Yet

Comments are closed

Looking to Create an ABLE Account? These Are the Resources You Need

time to read: 2 min