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Breaking Ground 103 - ABLE Act Turns Five Years Old

By Shelli King, Communications Director, TN Department of Treasury

Tennessee is nearly five years ABLE!

This year marks five years since the passage of Tennessee’s Achieving a Better Life Experience (ABLE) Act. ABLE TN was one of the nation’s first ABLE plans. It is a program to help people with disabilities save money for qualified expenses. ABLE TN is run by the Tennessee Department of Treasury. It has helped more than 2,100 people with disabilities save nearly $19 million for the future.

That $19 million and all future savings may be used, tax-free, for qualified disability expenses. ABLE TN accounts offer tax savings and the power of compounding interest to help Tennesseans with disabilities pay for things that make their lives better.

Who can open an ABLE account?

All Tennessee residents with a qualifying disability that happened before their 26th birthday can open an ABLE TN account, if one of these things is true:

  • I am eligible for Supplemental Security Income (SSI).
  • I am eligible for Social Security Disability Insurance (SSDI).
  • I have a disability diagnosis from a doctor.

A tool on ABLEtn.gov, called ABLE Assist, can help you know whether you are eligible to open an ABLE account.

Why should I get an ABLE account?

As many know, people with disabilities who get federal benefits like Medicaid or Supplemental Security Income (SSI) have limits on how much money and assets (like houses, cars, etc.) they can own and still keep getting those benefits. An ABLE account allows you to save above those resource limits without causing you to lose your federal benefits.

As long as your ABLE TN account balance is less than $100,000, there is no impact on many federal benefits. If you save more than $100,000 in your account, that extra amount will be treated as a “resource” under rules for federal benefits.

How do I use an ABLE account?

ABLE TN makes it easy to put money in your account. You can access your account online, and others can give money to your account. An ABLE TN account can be opened with as little as $25. It is easy to set up a monthly amount to be added automatically to your ABLE account from another bank account.

Anyone can contribute to your account, as long as they don’t give more than $15,000 over one year. (This amount is set by the federal rules about ABLE accounts.) Friends and family can use easy gift options with Ugift®, which gives you one simple code to share with anyone you want. It never expires and can help loved ones celebrate special milestones by adding gift amounts to your ABLE TN account.

The funds saved in an ABLE TN account can be used to pay for many different qualified expenses, including education, housing, assistive technology, health expenses, and more.

What if I work?

A new law in 2017 made changes so people can put even more into their ABLE accounts. Called the “ABLE to Work Act,” the law allows you to save more than the $15,000 per year limit if you:

  • Have income from a job.
  • Don’t participate in a retirement plan through work.

If those things are true, you can deposit more funds into your ABLE TN account each year. The extra amount can be up to the federal poverty guidelines for one person – which is $12,490 for this year. That means that if you have an ABLE account and work, you can save up to $27,490 in your account this year.

How is my ABLE money invested?

ABLE TN offers great investment options at a low cost. With 15 investment options to choose from, you can find a plan to best meet your needs. You can choose based on your savings goals, how much risk you want to take with your money, and how soon you need to spend your money. You can also change your investment plan twice per calendar year.

If you have questions or want to learn more, visit our website at ABLEtn.gov. And be sure to tell your friends with disabilities about this great way to save for the future!