*$16,000 calendar year limit (2022), plus additional for working individuals.
2016 marked the first year in which ABLE accounts were available to qualified beneficiaries. Now that you have some basic understanding of ABLE, including who is eligible to open an account, limits on contributions, and allowable purposes to use ABLE account funds, you may be asking yourself how you can prepare for enrollment in an ABLE program. The video “Becoming ABLE Ready” details suggestions on how a potential beneficiary and/or their family could begin to prepare to open an account.
When comparing State ABLE programs consider the following questions in order to find a program that best meets your needs:
Opening an Account
- What proof will the ABLE program require for you to document in order to open an account or show that your disbursements are qualified expenses?
- Is there a minimum contribution to open an ABLE account?
- Is there a fee to open an account and, if so, how much is that fee?
Maintaining the Account and Fees
- Is there a required minimum contribution to your account? If so, what is the amount?
- Do you have a clear understanding of the fees associated with management of the fund?
- Are the fees front end loaded or are they reduced if you leave your funds invested for several years?
- Are there restrictions on how often you can withdraw funds from your account?
- What are the investment options the state ABLE program offers?
- Are the options likely to meet your needs for limiting risk with the growth of your contributed dollars to the ABLE account?
- Are there options to help increase income from your invested dollars? What has been the history of the rate of return of the investment fund?
- What access will you have to learn about the current rate of return on funds invested? Could you access the information daily online?
- Are there investment options that have reduced fees if the funds are not touched for more than a year? If so, what are they?
- How will an account owner learn about the current rate of return on funds invested?
- Does the program offer any unique or value-added program elements to help you save, contribute to your account, grow the account, and manage your invested dollars?
- Does the state program offer any unique or value-added program elements (such as a match or rewards program, financial literacy info or program for beneficiaries) to help you save, contribute to your account, grow the account, and manage your invested dollars? If so, what is it?
Unique to Your State
- Does your state have a program and, if so, do they offer a state income tax for contributions to their account?
- Is there a “debit card/purchasing card” available with the program? Are there added costs to this?