Unlocking the Power of ABLE Accounts: New Legislation to Expand Opportunities
Are you familiar with ABLE accounts? These special savings accounts were created a decade ago to empower individuals with disabilities to save money in a way that doesn’t jeopardize their federal benefits. However, despite there being around 8 million Americans eligible for ABLE accounts, only a fraction of them are actually utilizing this valuable resource. That’s why Senator Bob Casey, D-Pa., is leading the charge to introduce new legislation that will both increase the contribution limits for ABLE accounts and raise awareness about the benefits they offer to the disability community.
What Are ABLE Accounts?
ABLE accounts, which stands for Achieving a Better Life Experience Act, allow disabled individuals to save money outside of asset limit requirements while also providing certain tax advantages. The funds in ABLE accounts must be used towards expenses that maintain or improve the health, independence, or quality of life for disabled or blind individuals. One of the key benefits of ABLE accounts is that investments grow tax-deferred and withdrawals are tax-free if used for qualified expenses.
The Expanding Reach of ABLE Accounts
Currently, more than 171,000 people with disabilities have saved an average of over $11,000 each through ABLE accounts. But there’s potential for even more individuals to benefit from these accounts in the future. By 2026, an additional 6 million people may become eligible for ABLE accounts as eligibility requirements expand to those who have a disability before age 46, compared to the current rule of having a disability before age 26.
New Legislation to Enhance ABLE Accounts
Senator Casey is set to introduce three new bills aimed at improving and expanding the reach of ABLE accounts:
1. Let Employers Contribute to ABLE Accounts
The ABLE Employment Flexibility Act proposes allowing employers to contribute to an employee’s ABLE account instead of traditional 401(k) accounts. This would enable employees with disabilities to receive matching contributions without jeopardizing their federal benefits, providing them with a path to a more secure retirement.
2. Allow Direct Deposits into ABLE Accounts
The ABLE Direct Deposit Act will enable employers or government programs to make direct deposits into ABLE accounts. This streamlined approach makes it easier for individuals with disabilities to participate in these accounts, ensuring they can benefit from the long-term savings potential ABLE accounts offer.
3. Help Inform People About ABLE Programs
The ABLE Awareness Act focuses on educating more individuals about ABLE accounts by requiring federal and state agencies to inform eligible individuals about these accounts when they enroll in certain benefits programs. Additionally, the bill calls for the creation of a grant program to fund media and billboard advertisements promoting ABLE programs. This initiative aims to remove barriers and increase accessibility to ABLE accounts for all eligible individuals.
Join the Movement
As we work towards a more inclusive and financially secure future for individuals with disabilities, the ABLE program serves as a vital tool in empowering them to save for their long-term needs. Stay tuned for updates on the progress of these new legislative proposals and join us in supporting the expansion of opportunities through ABLE accounts. Together, we can create a brighter and more financially secure future for all. Visit Extreme Investor Network for more updates on personal finance and empowering individuals to achieve their financial goals.