Planning ahead for special needs is crucial in Massachusetts, where resources and support can vary greatly depending on location and availability. The state's ABLE program allows individuals with disabilities to save up to $15,000 per year without affecting their eligibility for government benefits.
Individuals with disabilities in Massachusetts can save up to $15,000 per year in an ABLE account, which can be used for qualified expenses such as education, housing, and transportation. This account can be a lifesaver for families who want to provide for their loved ones without jeopardizing their government benefits.
The Massachusetts ABLE program offers tax benefits, which can be a huge advantage for families who want to save for their loved ones' future. Contributions to an ABLE account are not subject to state income tax, and earnings on the account grow tax-free.
Check this out: Able Account Tax Deduction
What Is the Attainable Savings Plan?
The Attainable Savings Plan is the official ABLE Savings Plan of Massachusetts, sponsored by MEFA and managed by Fidelity Investments.
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It's professionally managed by Fidelity Investments, offering various investment options to grow your savings.
Contributions to the plan are tax-free, and withdrawals on qualified expenses are also tax-free.
This plan is designed to be used without affecting other disability-related benefits, such as SSI, up to accounts of $100,000.
You can use the funds for a wide array of qualified disability expenses.
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Attainable Savings Plan
The Attainable Savings Plan is a tax-advantaged account for individuals with disabilities.
Individuals can save in this account without affecting their federal benefits.
It's sponsored by MEFA and managed by Fidelity Investments, which means you can trust that your money is in good hands.
Professionally managed investment options are available, so you don't need to worry about making investment decisions.
Funds in this account can be used for a wide range of qualified disability expenses.
You can use the funds in this account without affecting other disability-related benefits, such as SSI, as long as your account balance is under $100,000.
Contributions to this account grow tax-free, which means you won't have to pay taxes on the money you put in.
Withdrawals on qualified expenses are also tax-free, which can help you save even more.
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Qualified Disability Expenses
In Massachusetts, funds in an Attainable account can be used for any qualified disability expense. This means you have flexibility to use the funds as needed.
Qualified disability expenses include costs related to disability, which can be a huge relief for families with loved ones who require special care.
Funds in an Attainable account can be used for any qualified disability expense, providing peace of mind and financial security.
The specifics of qualified disability expenses are outlined in the account's terms and conditions, so be sure to review those carefully.
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Beneficiary Dies: Outcome
If the beneficiary dies, the state where they lived may file a claim to some of the funds in the ABLE account.
The state's claim is based on the amount they spent on the beneficiary through their state Medicaid program.
The Medicaid Payback provision can recoup Medicaid-related expenses from the time the account was opened.
If the beneficiary wasn't receiving Medicaid services during the time they had an ABLE account, they wouldn't be subject to the payback rule.
Additional reading: Can a Beneficiary Contribute to Their Own Able Account
In-Depth Information on the Attainable Savings Plan
The Attainable Savings Plan is a tax-advantaged account that allows individuals with disabilities to save without affecting federal benefits. This plan is sponsored by MEFA and managed by Fidelity Investments.
If you're looking for more information on ABLE accounts, there are several resources available. The SSA Program Operations Manual System (POMS) and the Federal Register: Guidance Under Section 529A: Qualified ABLE Programs are both valuable sources of information.
The Attainable Savings Plan allows individuals to contribute to a wide array of qualified disability expenses, and contributions grow tax-free. Tax-free withdrawals are also available on qualified expenses.
You can find more in-depth information on ABLE accounts through various sources, including the Centers for Medicare & Medicaid Services ABLE Medicaid Director Letter and the ABLE National Resource Center.
Here are some additional resources to explore:
- Centers for Medicare & Medicaid Services ABLE Medicaid Director Letter
- ABLE National Resource Center
- SPOTLIGHT ON ACHIEVING A BETTER LIFE EXPERIENCE (ABLE) ACCOUNTS — 2024 Edition
- ABLE accounts by state
The Attainable Savings Plan is professionally managed by Fidelity Investments, offering various investment options.
Frequently Asked Questions
What are the disadvantages of an ABLE account?
ABLE accounts have a Medicaid payback requirement, which means that any remaining funds in the account will be taken back by Medicaid upon the death of the beneficiary, and there are also other potential drawbacks to consider
What is an ABLE account in Massachusetts?
An ABLE account is a tax-advantaged savings account for individuals with disabilities in Massachusetts, created by the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014. It helps individuals with disabilities save for expenses related to their care and well-being.
What qualifies you for an ABLE account?
To qualify for an ABLE account, you must have developed a disability before age 26 and lived with it for at least a year, or expect it to last a year or more. This eligibility is based on your individual circumstances, so review the full requirements for more information.
What is the difference between a 529 and an ABLE account?
Key difference: A 529 account is typically owned by a family member, while an ABLE account is owned by the beneficiary themselves, with optional management by a designated representative
Sources
- https://www.mefa.org/ways-to-save/mefa-attainable/
- https://www.perkins.org/resource/able-accounts/
- https://namimass.org/financial/
- https://www.fshdsociety.org/2019/10/10/tax-advantages-from-able-accounts/
- https://www.baystateparent.com/story/special/2016/06/23/able-account-planning-ahead-for-families-with-special-needs/6238635007/
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