SSI Planning: How ABLE Accounts Allow Those With Disabilities To Save More Penalty-Free

Portrait of Asian young blind woman disabled person reading Braille book in creative workplace.
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Supplemental Security Income beneficiaries who need help paying disability expenses have the option of opening an Achieving a Better Life Experience, or ABLE, account, which lets people with disabilities save extra money without jeopardizing their SSI benefits.

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ABLE accounts are tax-advantaged savings accounts to which contributions can be made to meet the qualified disability expenses of the owner or designated beneficiary, according to the Social Security Administration. Depending on how much you have in the account, the money in it doesn’t count against asset limits that affect eligibility for SSI, Medicaid and other safety net programs.

SSI benefits are provided to Social Security recipients whose normal Social Security checks aren’t enough to cover basic living expenses. The program is overseen by the SSA and provides monthly payments to adults and children with a disability or blindness who have income and resources below specific financial limits. SSI payments are also made to people 65 and older without disabilities who meet the financial qualifications.

To qualify for SSI, you must fall below certain income and asset criteria. This includes the money you have in savings and investments accounts. However, the money you have in your ABLE account — up to and including $100,000 — does not count as a resource under SSI rules.

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ABLE accounts let you invest money and shield your earnings from taxes. Withdrawals are tax-free as long as the money is spent on approved expenses related to your condition.

With few exceptions, eligibility to open an ABLE account requires that you are receiving SSI or Social Security Disability Insurance benefits based on blindness or a disability that began before age 26. However, if you have reached the age requirement but aren’t getting SSI or SSDI, you still might be able to open an ABLE account if you meet the SSA’s disability definitions and criteria and can get a letter of disability from a doctor certifying your condition, according to the AARP

People with disabilities can have only one ABLE account, but anyone can contribute to it. The maximum contribution in 2023 is $17,000, the AARP said. People who can work are allowed to contribute an additional amount up to their annual gross salary or the individual Federal Poverty Level. For an individual, the FPL in 2023 is $13,590. In some states, contributions are deductible from state income taxes.

ABLE accounts typically have five to six investment options. By law, you can change how your investments are allocated only twice a year. As of January 2023, the accounts are offered in every state except Idaho, North Dakota, South Dakota and Wisconsin.

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Most ABLE programs only require you to certify that you have a disability and are eligible to open an account, meaning you don’t typically have to send in medical records or diagnoses to open an ABLE account. However, you must make the proof available for the IRS or the ABLE program if requested to satisfy the disability certification requirement.  Account owners must recertify their eligibility every year.

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To learn more about the ABLE program, visit the SSA’s ABLE spotlight page.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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