ABLE, short for Achieving a Better Life Experience Act, is a type of savings plan established in 2014 to provide support for those with disabilities. The accounts are similar to traditional 529 plans in that contributions can grow and be distributed tax-free for qualified expenses. The difference between a college savings 529 plan and an ABLE 529A savings plan is that ABLE funds can be withdrawn tax free to cover qualified disability expenses versus just qualified education expenses.
Does having assets in an ABLE account impact federal benefits?
Assets in an ABLE account won’t impact federal benefits unless the balance exceeds $100,000. Any excess beyond $100,000 in an ABLE account is considered personal assets, and once personal assets exceed $2,000 (such as in their checking account), Social Security benefits are suspended. This means that if assets in an ABLE account are $100,000 or more, plus checking or any other account surpass $102,000, Social Security benefits are halted. Social Security benefits resume once personal assets fall below $2,000 ($102,000 including $100,000 in ABLE account).
If you take distributions from your ABLE account for qualified housing-related expenses and retain them to be paid the following month (such as paying rent the following month), those distributions are countable resources for Social Security.
ABLE accounts do not impact Medicaid eligibility. However, upon the death of the recipient of aid, Medicaid can claim assets, such as those in an ABLE account, for payback. Outstanding qualified disability expenses, such as burial costs, receive priority over Medicaid claims. If Medicaid payback claims are greater than the remaining ABLE account, there is no further recourse against the disabled beneficiary’s other assets. read more…
We’ve been working with clients across the country for over 30 years, and we understand how important it can be to share your success by donating to charitable organizations, whether it’s through volunteering time or giving money. Once this charitable intent is determined, the next step is to determine how best to give. The following steps can help you identify the most efficient way to give, according to your circumstances.
Step 1 – Identify a cause that’s important to you
From supporting education and providing funds for cancer research, to protecting the environment and ensuring human rights for all, the list of worthy causes is endless. What’s important to remember when being philanthropic during your lifetime is that you have complete control over who receives your money or time.
Step 2 – Decide if you want to volunteer your time, money, or both
Being philanthropic doesn’t always mean writing a check. Many people give their time or expertise to organizations. This includes volunteering at events, raising money, participating on the board of directors, committees, etc. Some volunteer and also give money to organizations that are important to them. For many, they may not have the time or ability to volunteer due to a number of circumstances, however they choose to share their financial resources instead.
Step 3 – What are your funding sources?
If you decide to give part of your wealth, then the next step is determining how best to fund your gift. Do you have cash? Taxable investment accounts with securities (stocks or bonds) that have appreciated in value? Do you have a retirement account? Do you have a life insurance policy?
Step 4 – Is this a one-time or recurring gift, and do you want to make it during your lifetime or from your estate?
These are important considerations, as they impact the method you use to make your donation. For some of the methods listed in step 5, you can make a one-time, planned gift that can be distributed over many years to one or many charitable organizations. The giving method may be different for a one-time gift or recurring annual gifts to an organization or to charity in general. read more…
Making a move can be an exciting and challenging time, but you want to make sure that relocating is the best thing for you and your family. There are many financial impacts to consider before making final decisions.
First and most importantly, there’s the happiness factor. Making a big change can be very exciting, but there are things you’ll leave behind. It’s good to consider the life you have built, your family, friends and community. You want this move to be something that enhances your life and makes you happy.
Next, carefully review the financial impacts. You might have a great job opportunity, but relocating should also make overall financial sense. Many things will impact your income and expenses, so don’t let a shiny, new salary be the only thing to sway you on the financial scale.
Consider the actual costs of the move. Some companies cover relocation costs, while others give you a budget or say you are on your own. Determine if you want to have movers pack up your things or if you want to do it yourself. We often don’t place a value on our time outside of work, and packing up an entire household can be time consuming and stressful. Assign a value to your free time, and use that to calculate what packing would cost you. If your new company isn’t paying for you to relocate, get three or four quotes. Research each moving company’s reputation and insurance coverage for your goods, in addition to the total cost.
Compare current rental/mortgage rates in your area with those where you are looking to move. If you own your current home, seek advice from a real estate professional to help determine if you should sell your existing home, or rent it out. Unless you are already familiar with the new area, you’ll likely want to have temporary/rental housing while you look for a new home. Take time to get to know your new area. You don’t want to rush into buying a home, only to discover a year later that you wished you’d waited and bought elsewhere. You want to find a place that makes sense for you and your family.
If you’re not familiar with the new area, you might need temporary/rental housing while you look for a new home. A temporary housing situation could mean an additional move, or added cost of storage. If you prefer to rent, determine the cost of breaking a lease, if needed, and the cost of moving into a new home. You’ll likely need the first and last month’s rent, plus a sizeable deposit. read more…
Due to the recent presidential election, parts of the Affordable Care Act described below may change. The current rules will likely stay in place through 2017. We’ll provide updates as they occur.
When you leave a job, a key decision you need to make is what to do about health insurance when your current coverage ends. If you’re under age 65 and not yet eligible for Medicare, then your two major options are either COBRA, or policies on health insurance exchanges set up under the Affordable Care Act (ACA).
Consider the following factors to help you decide.
A big difference is cost. If you continue your existing coverage under COBRA, you pay 100% of the cost of coverage, plus an additional 2% in administrative costs. COBRA coverage is not eligible for any sort of subsidies to reduce the cost.
Policies sold through health insurance marketplaces generally cost less, especially some of the more “stripped down” policies. Also, as discussed in a previous post, low- and middle-income households may be eligible for a subsidy to further reduce the cost. The amount is based on household size and income. A family of four with less than $97,200 of household income may qualify for a significant subsidy.
One benefit of COBRA is that you keep the same coverage. You know that your doctor is already in-network, so you won’t have to change care providers. And, your deductibles and copays remain the same.
COBRA allows former employees to continue comprehensive medical insurance, dental, and vision plans. COBRA does not apply to life insurance or disability benefits. read more…
Due to the 2016 presidential election, parts of the Affordable Care Act described below may change. The current rules will likely stay in place through 2017. We’ll provide updates as they occur.
When an employer provides health insurance, you receive tax advantages that you don’t get when purchasing health insurance on your own. All the premium costs – whether paid by the employer or employee – are excluded from taxable income (both income tax and FICA taxes).
By contrast, individual health insurance you purchase on your own is paid for with after-tax dollars. These payments don’t receive the same tax advantages, so purchasing $1 of health insurance on your own is more expensive than purchasing $1 of health insurance through your employer plan
To address this, the Affordable Care Act (ACA) created a tax credit for individuals who purchase health insurance through the ACA marketplace. The credit is available to taxpayers earning up to 400% of the poverty level in the current year. For a household of two, that limit is $64,080 in 2017. A taxpayer’s income for this calculation is adjusted gross income (AGI), plus tax-exempt interest and any Social Security that was excluded from taxable income. So a married couple with no kids who earn $50,000 in 2017 would qualify for a tax credit if they had to purchase their own health insurance.
Because tax credits aren’t calculated until the end of the year, you have to pay your health insurance premiums all year in order to get money back when you file your taxes after the end of the year. This is where subsidies come in. read more…
Before traveling, it’s a good idea to figure out what your health insurance covers in case you have to make an unplanned visit to the hospital. Also, if you rent a car while traveling, the rental agency will ask if you want to buy rental car insurance, so it’s good to know whether you need it. Understanding how and where your health and auto insurance extend when out of town is important, especially if you want to avoid being on the hook for a big bill. First things first, though – make sure you travel with your healthcare insurance card for you and your family members, and bring proof of auto coverage.
What different types of healthcare cover?
Emergency care – HMO, PPO, HDHP, Medicare and Medicare Advantage healthcare plans cover medical emergencies no matter where you are. Emergency care is defined as medical conditions that require rapid or advanced treatments, such as surgery in a hospital setting. When traveling abroad, you’re still covered for emergency care (except in the case of Medicare and Medicare Advantage), but you may have to pay up front. Your healthcare provider will reimburse you afterward.
Urgent Care – If you need urgent care, HMO, PPO, HDHP, Medicare and Medicare Advantage (in most cases) healthcare plans cover you no matter where you are. This is for an injury or illness that requires immediate attention but is not an emergency, such as a sprained ankle or a severe sore throat that needs to be treated outside your regular doctor’s office hours.
Non-emergency, routine care – This type of care covers everything else. Plans differ on their coverage for non-emergency, routine care.
- HMO – You have to contact your primary care doctor first and get a referral. There are limits on the coverage when you travel outside of your plan’s network and around the country. Your primary care physician will direct your care. By coordinating through your primary care physician, you ensure that the care you receive is covered by insurance.
- PPO – Make sure to select doctors and hospitals in your provider’s network to keep costs down. Insurers like Blue Cross have large networks across the country with many doctors and facilities.
- HDHP paired with an HSA – Like with a PPO, visit doctors and hospitals in your provider’s network to get the best rates and reduce out-of-pocket expenses.
- Medicare – When traveling in the U.S., you can get the care you need at no extra cost. Medicare (original Medicare) doesn’t cover healthcare when traveling outside the U.S. There are a few exceptions, though, such as if you live in the U.S. but a Canadian hospital is closer to your home. There are Medigap policies that can provide coverage when traveling internationally.
- Medicare Advantage – Like with the other health plans, you may be subject to higher out of pocket expenses for seeing out-of-network doctors. Also, you may need to obtain prior authorization before you’re treated. Since private healthcare carriers manage Medicare Advantage, your coverage depends on your plan when traveling outside the U.S.
When renting a car, you’ll be asked whether you want to buy insurance coverage for the vehicle. The daily rate may be reasonable, but you don’t want to pay extra for coverage that’s unnecessary.
- Comprehensive and liability – If you carry comprehensive and liability coverage on your personal car, this coverage extends to your rental car and should be adequate, unless you’re renting a car worth much more than your personal car. Any gaps not covered by your primary insurance coverage may be covered by your secondary insurance provider, such as your credit card. Keep in mind, though, that this coverage does not extend beyond the U.S., Canada, and in some cases, Mexico. If you’re traveling outside the U.S, your secondary coverage, such as your credit card, becomes your primary.
- Personal effects coverage – Your homeowner’s, renter’s or condo insurance covers personal items if they’re stolen out of your rental car.
- Personal accident insurance – If you have personal accident insurance, the coverage extends to your rental car in the event of a crash.
Credit cards can provide secondary rental insurance. The car must be rented with a credit card under your name and you must decline full coverage from the rental car company for this coverage to be in effect. If you don’t have personal auto insurance, your secondary credit card coverage becomes your primary. In this case, consider buying the rental car insurance if they offer liability protection because credit cards don’t provide liability insurance.
Here’s what the following credit cards cover:
- VISA offers rental car coverage on all of its credit cards.
- Mastercard offers rental car coverage only with their Gold, Platinum, World and World Elite credit cards.
- American Express offers premium coverage for a small fee, and has options for increased coverage.
- Discover’s coverage is limited to a few cards (Escape, Motiva, Open Road, and More), and only covers collision costs.
For more information, see Rental Car Insurance: Which Credit Cards Have You Covered.
Your credit card is typically your secondary coverage. However, when traveling abroad, it becomes your primary because most personal auto policies don’t extend coverage beyond the U.S. and Canada. Check with your credit card provider to see if they offer coverage in the country you’re traveling to. If they do, find out what the coverage is, and ask if they charge something to upgrade the coverage, such as a daily rate or flat fee. If your credit card company doesn’t provide coverage in the country you’re traveling to and your personal auto insurance doesn’t extend, then it’s a good idea to buy the insurance the rental car company offers.
The experience of traveling can be a great way to live life to its fullest. However, being aware of what coverage you have and how it extends to the place you’re visiting is important because it can save you money, and more importantly, many headaches.