New service allows for greater long-term investments
A new program is now available in Indiana aimed at providing tax-advantaged savings accounts for people with disabilities and their families. Grunden Law Office cares about our clients, especially those who have additional challenges to overcome. That is why the rolling out of Indiana’s new ABLE (The Achieving a Better Life Experience Act of 2014) account is so exciting for us to be able to share. This new savings opportunity allows individuals with disabilities and their families to save for many daily, disability-related expenses on a tax-deffered basis without limiting their ability to benefit from supplemental security income (SSI), Medicaid and other federal programs.
As far as public assistance, individuals a required to meet a “resource limit,” meaning that their cash savings, retirement funds, and other items of large value must not amount to more than $2,000. This puts many individuals with disabilities at a disadvantage, due to high medical costs that come with their care and very existence. Now with the ABLE account option, the act takes into consideration the cost of raising a child or adult with disabilities, much-needed technology and healthcare not covered by regular insurance, Medicaid, or Medicare, and accessible transportation and housing. This is the first time in public policy that a government act acknowledges these types of limitations within the system - it is truly groundbreaking in scope.
Special tax advantages:
• Earnings may compound federally tax-deferred, maximizing your return.
• Withdrawals are tax-free, if used for qualified disability expenses.*
No impact on current benefits:
• Balances of $100,000 or less are excluded from the SSI resource limit; only the amount
OVER $100,000 is counted against your SSI resource limit, whether alone or in combination
with other resources.
• If you exceed your SSI resource limit, your SSI benefits will be suspended until the ABLE
account balance no longer exceeds your resource limit.**
• You’ll continue to be eligible for Medicaid, regardless of your account balance.***
• Open an account online with as little as $25.
• Access your account by phone or online 24/7 from a PC, tablet or mobile device.
• Select the checking option to easily access your funds via a debit card.
Contribute up to $14,000 per year. Account balance limit: $450,000.
Who is Eligible
Individuals with significant disabilities who have had an onset of said disabilities before the age of 26 are eligible to take advantage of the ABLE Act. If an individual meets this requirement and is already receiving SSI or SSDI, they are automatically eligible to create an ABLE account. If you are not receiving these benefits but still meet the age requirement, you still may be able to open an ABLE account, as long as you meet the Social Security’s definition of “significant functional limitations” and obtain a certified letter from your licensed doctor.
You can open the account for yourself, or an authorized individual can open one on your behalf, if:
• You were diagnosed with a disability before the age of 26; and
• One of the following is true:
• You experience blindness as determined by the Social Security Act; or • You are entitled to receive Social Security disability benefits (SSI or SSDI) or have a similarly severe disability and possess a written diagnosis from a licensed physician.
Frequently Asked Questions
- Do I have to prove eligibility?
No. To open an account, you must certify that you have a physical or mental disability that can be expected to last for at least a year or can cause death; or you are blind; or your disability is included on the Social Security Administration’s List of Compassionate Allowances Conditions; and such blindness or disability occurred before age 26. You should have a record of the doctor’s signed diagnosis, a benefits verification letter from the Social Security Administration or other relevant documentation for account verification, as needed.
- Do I have to prove that withdrawals are for qualified disability expenses?
Not at the time of the withdrawal. Annually, INvestABLE Indiana will report the total amount of your withdrawals to the IRS and the date and amount of each of your withdrawals to the Social Security Administration. In the event that either entity wants to verify the expenses,
it’s recommended that you keep detailed records.
- Can I have more than one INvestABLE Indiana account?
No. You’re limited to one ABLE account, except in the case of a rollover from another qualified ABLE program. This extends beyond NvestABLE Indiana to include accounts in other ABLE programs. In the case of a rollover to an ABLE account for the same account owner, the account from which the funds are withdrawn must be closed within 60 days of the withdrawal.
- Can friends and family make contributions into my account?
Absolutely. Anyone can contribute directly to your INvestABLE Indiana account. No matter who contributes, you, the account owner or authorized individual, retain control over the account.
Get started with just a few clicks
It only takes a few minutes to open an INvestABLE Indiana account:
• Read the Plan Disclosure Documents for important details.
• Enroll at in.savewithable.com
Contact INvestABLE Indiana: 1-888-609-3457, Monday − Friday, 8:00 am - 5:00 pm CT
Visit www.insavewithable.com to obtain Plan Disclosure Docuements and program details.
For a complimentary consultation to assess long-term estate or medicaid planning for you and your family, please complete the form below. We'll be happy to arrange a time for you to ask questions and consult with one of our attorneys to determine a customized plan for your situation.
*Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well
as applicable state and local income taxes.
**Please see the Plan Disclosure Documents for complete details on SSI suspension and any requirements on when
you use the funds to prevent suspension of benefits.
***Upon the death of the account owner, the state Medicaid agency shall be a creditor for the total medical assistance paid
under the State’s Medicaid program on behalf of the account owner after the establishment of the account, upon filing of
a claim for payment by such state.