Step 4: Monitoring My ABLE Account
ABLE accounts provide an incredible new opportunity to save for your future without losing benefits. However, there are certain types of responsibilities that come along with managing your account. Understanding these responsibilities, and how to handle them, will help you maximize the benefits of being an ABLE account owner and assist you in growing in your financial independence.
Topic at a glance
When I purchase a qualified disability-related expense with my ABLE funds, should I keep any record of those?
Upon purchasing a qualified disability expense (QDE), we recommend that you keep a receipt of that purchase, along with a brief explanation of how that expense relates to your disability and helps you maintain or increase your health, independence and/or quality of life. This information could come in handy in the event that you are ever audited by the Internal Revenue Service (IRS). The IRS is responsible for making sure these accounts are being used appropriately.
Is it important to monitor the balance in my ABLE account even if I am not making any purchases and/or contributions?
Yes. Remember that these accounts can be associated with investments, and depending on your investment choice, your account may fluctuate depending on how those investments are performing (regardless of whether or not you are making purchases and/or contributing to the account). It is also important to remember that you can change your investment direction up to two times per tax year.
Are there other reasons why it might be important to keep an eye on the amount of money in my ABLE account?
For those who receive Supplemental Security Income (SSI), only the first $100,000 in the ABLE account is protected from the SSI asset limit. ABLE account holders who receive SSI benefits will continue to receive their SSI payment until their ABLE account, combined with non-ABLE resources, exceeds $100,000 by an amount which is over the SSI resource limit. Once this happens, SSI will be suspended until the account balance over $100,000 along with non-ABLE resources no longer exceeds the resource limit. Although SSI benefits may be suspended, Medicaid benefits remain intact.
Monitoring your account as it starts to approach this limit is important. There are a number of things you can do to prevent your SSI cash benefit from being suspended, such as making a large QDE purchase, or placing the funds in a non-interest bearing option within your ABLE program.
- ABLE accounts offer choices for savings and investing. You can make changes to your investments twice per year.
- If you find an ABLE program better suited to your needs, you can rollover funds in your ABLE account from one program to another so long as you meet the program's residency requirement, if they have one. Most states do not. There may be a fee.
- Track your qualified disability expenses (QDEs) and maintain receipts. They may be needed if there is ever an audit.