Provide Support for Disabled Family Members with an ABLE Account

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 The difference between a college savings 529 plan and an ABLE 529A savings plan is that ABLE funds can be withdrawn tax free to cover qualified disability expenses versus just qualified education expenses.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. (more…)

Moving Considerations

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. (more…)