Disabled? Here’s One Way To Save Money On Your Own Through A Special Savings Account

Very few people with disabilities are considered financially healthy. They are often below the poverty line.

Nearly half of working-age people with disabilities — some 40 million in the U.S. — have annual household incomes under $30,000 (compared to just 21% of working-age non-disabled people). Only about 10% of working-age people with disabilities are financially healthy, according to the Financial Health Network (FHN).

“Thirty-three years have passed since the Americans with Disabilities Act, yet it is an unfortunate reality that financial health remains inaccessible to so many people in America,” said Jennifer Tescher, founder and CEO of the Financial Health Network.

One promising solution to burdensome asset limits, the FHN reports, is the ABLE account, although it’s rarely used and poorly understood. Social Security and Medicaid impose asset limits on their beneficiaries, but ABLE accounts allow eligible individuals to accumulate assets without losing these benefits. They definitely need to be expanded so that more people can use them. Unfortunately, few people know about them.

In the FHN’s survey of individuals with disabilities, “less than 1% had an ABLE account, and all of them had less than $10,000 in their accounts. In addition to low account ownership, we find a near-universal lack of awareness or knowledge about ABLE accounts among the disability community: 93% of survey respondents said they were unfamiliar with ABLE accounts.”

If you’re disabled, an ABLE account is worth exploring. Contributions to the account, which can be made by any person (the account beneficiary, family, friends Special Needs Trust or Pooled Trust), must be made using post-tax dollars and will not be tax deductible for purposes of federal taxes; however, some states may allow for state income tax deductions for contributions made to an ABLE account, according to the ABLE National Resource Center.

Want to know more about ABLE accounts? Click here.

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