A Financial Resource for Uncertain Times
By Sarah Pennington, ABLEnow
The coronavirus pandemic has shifted the way most Americans are spending their time and money. An ABLE account can be a helpful resource for eligible individuals with disabilities to maintain health, independence and quality of life during this time.
What is an ABLE account?
ABLE accounts are tax-advantaged savings accounts for eligible individuals with disabilities. The result of a cross-disability advocacy effort, ABLE accounts originated with The Achieving a Better Life Experience (ABLE) Act of 2014. This federal legislation opened the door for ABLE programs, which must be set up and administered by a state. In 2015, Virginia became the first state in the country to pass ABLE legislation after the federal ABLE statute passed.
This state legislation authorized development of the Virginia-sponsored ABLE program, ABLEnow. And thanks to a 2015 amendment of the ABLE Act eliminating a state residency requirement, ABLEnow accounts became available to eligible individuals in all U.S. states in 2016.
Importance of ABLE accounts
There has never been a better time to consider opening an ABLE account. Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, millions of Americans are receiving a stimulus payment from the federal government. For individuals with disabilities, this payment may count as an asset and reduce means-tested benefits unless it is spent or put into an ABLE savings account within 12 months from receipt.
ABLE-eligible individuals may want to consider saving all or a portion of their federal stimulus payment in a tax-advantaged ABLEnow account.
- Do not affect eligibility for most benefit programs, such as Medicaid and Supplemental Security Income (SSI).
- Are tax-advantaged, so earnings on investments grow tax free.
- Can accept contributions from anyone: the account owner, family and friends.
- Are available to eligible individuals in all 50 states.
Using an ABLE account
To avoid going out in public, many people may be spending less on certain things such as transportation, in-restaurant dining and live entertainment. But there are still many expenses.
Funds in an ABLE account may be used for a wide variety of these qualified disability expenses not covered by benefits. Here are five ways ABLEnow customers are using their accounts during the pandemic:
- Health — Need to stock your medicine cabinet? An ABLEnow account can be used to pay for everyday essentials such as a thermometer, over-the-counter medicines, face masks and sanitizer. While most people know funds in an ABLE accounts can pay for healthcare expenses not covered by insurance, qualified disability expenses may include telemedicine and virtual therapy appointments as well.
- Food — More and more, people are turning to online services to get their essentials delivered as they try to stay socially distanced. An ABLEnow account may be used to pay for the account owner's grocery delivery or pickup, takeout meals, pizza delivery and more.
- Education and respite — Even under the best of circumstances, the logistics of education and caregiving can be challenging. The pandemic has made these tasks even more complex. In different parts of the country, school, daycare, homecare and respite services may look different based on local guidance. Funds in an ABLEnow account may be a valuable resource for families turning to in-home education options, private tutoring and other new avenues for care.
- Entertainment and advocacy — Americans are consuming unprecedented levels of media while sheltering at home. An ABLEnow account could be used to purchase a new device, subscription or service to stay connected and informed. Use funds in an ABLEnow account to register for a conference, participate in a virtual class, or catch up on your reading list with new books.
- Save and invest — If funds aren't needed immediately, some ABLEnow customers are taking the opportunity to build emergency savings and invest for the future. Asking loved ones for gift contributions or contributing funds from your tax refund or stimulus payment are ways to boost ABLEnow savings for long-term.
Start Saving Now
In this time of uncertainty, funds in an ABLEnow account can provide financial peace of mind.
Call 1-844-NOW-ABLE or visit able-now.com to obtain information on the program. Seek the advice of a professional concerning any financial, tax, benefits or legal implications related to opening an account. Participating in ABLEnow involves investment risk including the possible loss of principal. ABLEnow is administered by Virginia College Savings Plan. For non-Virginia residents: other states may sponsor an ABLE plan that offers state tax or other benefits not available through ABLEnow. ©2020 Virginia College Savings Plan. All Rights Reserved.
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