Introducing A Tax-Smart Way to Save for Disability Expenses
With the passage of the Achieving a Better Life Experience (ABLE) Act, Americans with disabilities now have the opportunity to save and invest in a tax-advantaged account for short and long-term disability related expenses, without risking their disability benefits. An ABLE account is a smart way to save that supplements, rather than replaces, your Medicaid and Supplemental Security Income (SSI) benefits. With the Attainable Savings Plan, the ABLE plan offered by MEFA and managed by Fidelity Investments, individuals can choose from various professionally managed investment portfolios, giving contributions a chance to grow tax-deferred and when used for qualified disability expenses are federal income tax-free.
Who is Eligible for an Attainable Savings Plan?
Individuals are eligible for an Attainable account if they are already receiving benefits under Supplemental Security Income (SSI) and/or Social Security Disability Insurance (SSDI). If not, they may still be eligible if they certify that they are blind or disabled and have a written diagnosis of their condition by a licensed physician. Under all circumstances, the onset of the disability must have begun prior to age 26.
How Can Attainable Benefit You?
In assessing whether an Attainable Savings Plan is right for you, you should consider:
- The tax benefits may be significant. When you contribute money to an Attainable account, the money is invested in investment portfolios and may grow over time. No federal income tax will be owed on withdrawals, including any earnings, if the money is used for qualified disability expenses.
- The money in your Attainable account will not usually impact your eligibility for Supplemental Security Income benefits; however, any account balance over $100,000 will be counted as a resource of the designated beneficiary and could result in the suspension of your SSI benefits.
- Annual contributions may not exceed the federal gift tax exclusion limit, which is $14,000 as of 2017. An existing account balance can grow without limitation, but you can't make additional contributions once the account balance reaches $400,000 (as of 2017). Fidelity automatically prevents excess contributions from being accepted.
- Qualified disability expenses are any expenses for the benefit of the account owner in maintaining or improving his or her health, independence, or quality of life. These expenses include, but are not limited to, education, housing, transportation, employment, training and support, assistive technologies and related services, personal support services, or health and basic living expenses.
Learn more about Fidelity's ABLE plan at www.fidelity.com/attainable.
About the Attainable Savings Plan:
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
The Attainable Savings Plan is offered by the Massachusetts Educational Financing Authority and managed by Fidelity Investments. Qualified ABLE Programs offered by other states may provide state tax benefits to their residents or taxpayers that are not available through the Attainable Savings Plan. If you are not a resident of Massachusetts, you should consider whether your home state offers its residents or taxpayers state tax advantages or benefits for investing in your home state's qualified ABLE program before making an investment in the Attainable Savings Plan.
Units of the portfolios are municipal fund securities and are subject to market fluctuation and volatility. You may have a gain or loss when you sell your units.
Please carefully consider the Attainable Savings Plan's investment objectives, risks, charges, and expenses before investing. For this and other information, contact Fidelity for a free Disclosure Document or view one online. Read it carefully before you invest or send money.
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