Families that have a child with a disability often face unique financial wellness challenges as saving for future housing and health care expenses may make them ineligible for public assistance programs they still need. Fortunately, a special type of savings account called an ABLE account can help families save on a tax-free basis and improve their financial wellness.
ABLE accounts become especially valuable when a child with a disability becomes an adult. At that point, publicly provided support services shift away from education toward income, health care, food, and housing assistance, but qualifying for some public assistance programs requires that the disabled individual have only limited assets and income of his or her own, creating immense long-term financial challenges. Like 529 plans used to save for college, ABLE accounts allow for the growth of assets on a tax-free basis as well as for tax-free withdrawals for qualified distributions to pay disability-related expenses.