State of New York has become the 27th state in the nation to launch an ABLE program. The New York ABLE Program, named NY ABLE, is administered by the Office of the New York State Comptroller, managed by Ascensus Broker Dealer Services, Inc. and backed by Vanguard, Sallie Mae and Fifth Third Bank. NY ABLE accounts are available to eligible New York residents with disabilities.
NY ABLE allows qualified individuals with disabilities to save up to $14,000 a year in an ABLE account without jeopardizing their eligibility for federally-funded means tested benefits, such as Supplemental Security Income (SSI) and Medicaid. The funds in the account can be used for disability-related expenses that assist the beneficiary in increasing and/or maintaining his or her health, independence or quality of life. The maximum account limit for a NY ABLE account is $100,000.
Individuals with disabilities and their families are often relegated to a life of poverty as a result of not being allowed to build even the most modest levels of resources. Individuals receiving supports through Social Security, Medicaid and other publicly-funded programs are often disqualified from those programs if they have more than $2,000 worth of resources or assets. With the launch of ABLE programs nationwide, individuals with disabilities and their families will be able to allow the individual with a disability to grow their savings and not be subject to the embarrassment of poverty.
Like the other ABLE programs across the country, the NY ABLE program focuses efforts to ensure minimal costs associated with establishing and maintaining an ABLE account (which can be done online). There is a $45 annual fee payable quarterly at $11.25. If paper statements are selected, the fee increases to $13.75 per quarter ($55 annually). The NY ABLE program has a monthly maintenance fee of $2, which can be waived if the average daily balance is over $250 or by electing electronic statements at Fifth Third Bank. The annual investment fee is 0.40%.
In addition to NY ABLE, there are, as of the date of this blog, 26 other states that have launched ABLE programs: Alabama, Alaska, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia. Most of these ABLE programs are open to eligible individuals nationwide.
Eligible individuals and their families may consider looking at another State besides New York, if that state offers better benefits. For instance, in Ohio, the ABLE program allows for a maximum balance of $445,000.00 for the accounts, while maintaining the federally mandated $14,000.00 annual limitation for deposits into the ABLE account. This would mean a family could deposit the maximum amount of $14,000.00 for over 30 years before reaching the limit.
NY ABLE offers 5 account options for individuals that open an ABLE account. There are four investment plans based on the level of risk one is willing to take, much like a 401k plan. These levels are Conservative, Intermediate, Moderate, and Aggressive. NY ABLE also offers a checking account option, allowing the account to have a debit card and checkbook associated with it. The checking account could be very appealing to those families where the individual with a disability should experience handling a checkbook. There is also the benefit of not having any risk, as these are FDIC insured accounts, through Fifth Third Bank.
For more information on the NY ABLE program and how to enroll, families can visit www.mynyable.org.