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Grandparents’ Loose Change to Future Savings

Gene Perret once said, “What a bargain grandchildren are! I give them my loose change, and they give me a million dollars’ worth of pleasure.”


I’m sure you understand exactly where he is coming from. But perhaps you are looking for a way to provide for your grandchild with some of your loose change. An ABLE (Achieving a Better Life Experience) account is a great vehicle for grandparents and family members to save for their loved ones with a disability.


What is ABLE?

The ABLE ACT was signed into law in 2014. Since its passage, 44 states and D.C. have established programs that provide tax-free savings accounts for individuals with disabilities. These programs allow for individuals with a disability to save without impacting resource-based benefits such as SSI, SSDI, or Medicaid.


Nationwide, 101,000 ABLE accounts have been opened, with an average savings in each account of $8,600 and a total amount of $874 million dollars.



How do ABLE accounts work?

ABLE accounts are limited to $15,000 in annual contributions unless the individual is working and not contributing to a retirement plan. Accounts can have up to $100,000 in balances without impacting SSI or SSDI and these funds will not affect Medicaid. If the individual is not receiving SSI or SSDI, they can save more than the $100,000 (amount depends on what state plan you open).


What can the funds be used for?

ABLE participants may use the savings for a wide range of qualified disability expenses - from medical costs to education, assistive technology, service animals, housing, transportation, basic living expenses and more.


Alabama ABLE Savings Plan

The Alabama ABLE Savings Plan has a low annual fee of $35.00 and is administered by the State of Alabama Treasurer’s Office. Contributions into the account can be deposited into an FDIC savings account or one of three Vanguard portfolios. Contributions may also be deductible for Alabama residents up to $5000.00 per filer on their state income tax. Remember to check with your own state for any tax benefits or fee expenses.


With greater savings comes increased financial security and flexibility for the disability community – so that loose change in your pocket can lead to some big change in your grandchild’s future. ABLE accounts provide a great way to make those dreams into a reality.


About the Author

Anita Kelley is the Savings Director for the Alabama State Treasurer’s office which oversees the Alabama ABLE Savings Plan. Visit alabamaable.gov or call 1-833-711-2253 to learn more and start investing in your loved one’s future.

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