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November 29, 2018 at 02:39 PM
(Photo: Thinkstock)
Ascensus released data on the savings behaviors of people with ABLE accounts on its platform, in a first look at both utilization and growth.
ABLE accounts, so named for the federal Achieving a Better Life Experience (ABLE) Act passed in 2014, allow tax-deferred investment growth and tax-free withdrawals when savings are spent on qualifying disability-related expenses. (Earnings on nonqualified withdrawals, on the other hand, may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.)
The ABLE account allows people with a disability to save without risking the loss of federal disability benefits—and anyone, whether family or friends, can contribute to such accounts, which have an annual contribution maximum of $15,000.
The report by Ascensus, an independent recordkeeping services provider and a third-party administrator, finds that even though ABLE accounts just opened formally for enrollment in 2016, ABLE account owners have contributed enough to make average balances exceed $4,100 across all age ranges in only two years.
