“I just want people to know that it’s out there. It’s a good way to save money. If you want to put some money away for that new house or for a very expensive trip to Hawaii, that ABLE account would be really nice to have.”



Episode 5: Reach Financial Goals with ABLE

In 2014, President Obama signed into law the Achieving a Better Life Experience Act, better known as ABLE. The ABLE Act allows for people with disabilities to save money without disrupting their benefits. On Episode 5 of Focus on the Future, host Allycia Wolff chats with Katie McDermott about ABLE Accounts. Katie is the Self-Advocate Associate at The Arc Minnesota. In their conversation, they talk about how ABLE can keep you financially secure and living the life that you choose.

About ABLE

The Achieving a Better Life Experience Act was signed into law in 2014 by President Obama after receiving broad support. ABLE accounts allow people with disabilities to save up to $15,000 per year, or $100,000 throughout a lifetime, without disrupting benefits. ABLE funds can be used in any way that promotes quality of life for people with disabilities. Learn more at savewithable.com.

Resources mentioned in this episode

About Focus on the Future

Focus on the Future is a podcast for caregivers and families supporting people with disabilities. In each episode, a conversation about the journey of discovering our best life and how to achieve it. While exploring legal, financial, and quality of life structures, Focus on the Future aims to get back to what matters most: living a fulfilling and meaningful life that is defined by each individual person. Learn more at arcminnesota.org/podcast.

Episode 5 Transcript

00:00 [Music playing]

00:03 [Allycia Wolff] Welcome to Focus on the Future, a future planning podcast for caregivers and families, supporting people with disabilities. Focus on the future is a podcast of The Arc Minnesota, a nonprofit advocacy organization working with folks with intellectual and developmental disabilities. Hey, my name is Allycia Wolff. I’m an advocate here at The Arc and your host for Focus on the Future. In this week’s episode, we’re going to be talking about the ABLE accounts. We’re doing a little mini episode this week to talk about this checking account/investment account that people with disabilities can open that empowers people to save their own money and not affect any benefits that they’re receiving. And today I wanted to bring in Katie McDermott. She is the Self-Advocate Associate here at The Arc Minnesota. Katie does a lot of work with self-advocacy in our community and making sure that there are a lot of opportunities for self advocates to be involved politically, make sure their voices are heard.

01:06 [Allycia] And that is her passion is so that everybody has the ability to live a good life, which is kind of the underlying theme of this podcast. And I wanted to bring Katie in because she works with people on a day to day basis where it’s really important to have that financial security and that financial knowledge. And basically that’s what the able account is all about. Making sure that people have the opportunity to save and use their own money and feel autonomy in that. So let’s dive into the conversation with Katie and then we can talk a little bit more after.

01:43 [Allycia] Hey Katie!

01:44 [Katie McDermott] Hey Allycia!

01:45 [Allycia] Thanks for joining me today. I just wanted to talk about the ABLE account a little bit. Would you like to introduce yourself before we jump in?

01:53 [Katie] Sure. I’m Katie, I’m the Advocate Associate here at The Arc Minnesota. I do a lot of the self-advocacy piece. We have a Self-Advocacy Advisory Committee that meets every second Tuesday here at The Arc office of the greater Twin Cities from 5 to 7:30. So if there’s any self-advocates that want to learn more, just email me at katiemcdermott@arcminnesota.org.

02:18 [Allycia] Yeah. And we will have a episode about self-advocacy in the future of this podcast. So you’ll be coming back. But today I wanted to chat with you about the ABLE account. So what do you know about the able account right now?

02:32 [Katie] Well, I know the ABLE account is really important because you can save money, um, and it won’t, if you have social security, the ABLE account, you can save money and it won’t affect the social security benefits that you have or MA [Medical Assistance].

02:51 [Allycia] Exactly. Yeah. So if you’re on social security, you can only have $2,000 to your name or if you’re on medical assistance, depending on what kind, but usually it’s like $3,000. So the ABLE account allows people to save in that account $15,000 a year, $100,000 over a lifetime without it affecting those benefits. So it can be a really great resource to people who want to save money. Like if you want to save up for a car.

03:19 [Katie] Or save for a trip. Or save for a conference convention. That’s a really great way to save money.

03:26 [Allycia] Exactly. Yeah. Do you have an ABLE account right now?

03:28 [Katie] Not right now. But I plan on getting one, I plan on setting money aside and putting money in there once I have a chance.

03:39 [Allycia] Yeah, absolutely. Cause it could be a really good account for anyone with a disability to save, save up money. Cause you get like a debit card and you can set it up online or you can request a paper application. So if you go to www.savewithable.com that’s where you can set it up because you can only have one ABLE account if you have a disability. So if you go online to www.savewithable.com you can set it up and it only costs like $25 to set up because it’s just like a checking account.

04:16 [Katie] Well that’s a good deal. $25. You can put $25 and start an ABLE account and then you can put as much money as you want on your ABLE account. Save money.

04:28 [Allycia] Yup. Up to $15,000 a year. Yeah. And so it’s actually up to $15,000 a year that you or anybody can put into that account. Plus if you’re making money like directly from an employer, you can put an additional $12,000 in that account. So like $15,000 could come from anywhere. $12,000 additionally could come just from employment. So you have the potential to be able to save a lot of money. Yeah. And the ABLE account started from, have you ever heard of the 529 account? The college savings accounts?

05:03 [Katie] Yes, I have heard of those.

05:05 [Allycia] Yeah. So a lot of people set up, a lot of parents set up a 529 college savings account for their children when they’re like first born for to save for college. And then sometimes people are diagnosed with disabilities later in life and then they, their parents say, Oh, well I have this 529 account I and it’s, and it has a bunch of money in it, but my child has a disability and I don’t think that they’ll ever be going to college.

05:32 [Allycia] And so then parents can move money from that 529 account into an ABLE account so that if you have a disability you can use that money, like you said, for a vacation or to go to a conference or to save up for a car. So that’s like a way that the ABLE account can be used really well by a lot of people in a lot of different ways. Do you, so you, you lead the self advocacy advisory committee meetings?

05:59 [Katie] Yes, I do.

05:59 [Allycia] Uh, have you guys ever talked about the ABLE account or do you have any questions about the ABLE account that you’ve heard?

06:06 [Katie] Um, I think we have talked about the ABLE account, but I think it was quite some time [ago], so we might have to bring that back and refresh our memories, um, about the ABLE account. But, let’s say I want to buy a house someday and I have to save up so much money and it’s more than $15,000. Am I able to do that with the ABLE account?

06:31 [Allycia] Yeah. So you can save $15,000 this year and then next year you could save up an additional $15,000 so each year, and it’s a new year when the new year happens. So January 1st is a whole new year. So if you put $15,000 on that account within the next month, because we have November and December left, then January 1st you could save a whole nother $15,000. So it’s 15,000 per year until you can get $100,000 in that account. So it would take like seven or eight years to get there. But like so 15 this year, 15 next year, that’d be $30,000 so that’s a really great start on a down payment for a house. Yeah. And then a lot of people want to know if somebody can help them in managing that account because an ABLE account runs a lot like a checking account.

07:25 [Katie] That was my next question is like if someone could look over that account and trying to build your skills on saving money but also build your skills on managing the account.

07:35 [Allycia] Exactly. Yeah. And I say that that’s a huge reason why a lot of people should open up an ABLE account because it gives people more of a chance to learn how to save and spend and manage their own account without somebody else just doing it for them. Because if you were to open up an ABLE account, it would be your account. It’s in your name, it’s your money and you can have people support you in that because we all need help. Especially with money. Right. It’s like so hard to manage money. Um, so you can have somebody just like casually help you manage that. Meaning like you could log into the account together and you could talk about it or you can have a power of attorney for the able account. So you could have like your sister be your power of attorney for the ABLE account. So she would have the ability to log on, um, see like how the money is being spent, be able to call the ABLE account if there were any issues. And so she could help you manage that. But it’s still your account. It’s in your name. You have the autonomy to be able to make those decisions.

08:38 [Katie] Oh, that would be good to know because maybe someone might need help doing that. Including myself, but I know there’s others that may be helping others may need help managing their accounts.

08:51 [Allycia] Mmhmmm, yeah. Did you have any other questions about the ABLE account or do you think there’s anything else we should tell people?

08:59 [Katie] I just want people to know that it’s out there. It’s a good way to save money, especially if you have a disability and because of social security you can only save so much. But if you want to put some money away for that new house or for a very expensive trip to Hawaii, that ABLE account would be really nice to have, cause then you could put money away and it won’t affect your benefits or your social security. I think it’d be very helpful in the long run.

09:32 [Allycia] Yeah. And people usually ask like, how can you spend that money that’s in the ABLE account and you can spend it on anything that’s a qualified disability expense. So anything that like relates to you as a person who has a disability and what you want to do to live a good life. And it’s really vague actually, the description that the national resource center for the ABLE account gives. But I’ll look it up here and we can read it.

10:03 [Katie] Well, I know, I think it’s used for health care. Um…

10:10 [Allycia] Yeah. So it says which expenses are allowed by the ABLE account? And it says a qualified disability expense means any expense related to the designated beneficiary, you, as a result of living a life with disabilities. This may include education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services, and other expenses which would help improve health, independence and or quality of life. So pretty much everything.

10:49 [Katie] That’s pretty much everything I was going to say that’s a really great point because now you know what you can spend your money on.

11:00 [Allycia] Yeah. And so it’s a really, the ABLE account is just a really good resource and it was passed back in 2013 when President Obama signed it into law. And so now there’s a lot of people with disabilities that have that as a resource because with social security you can only have $2,000 to your name, but that kind of forces you to live at a really-

11:22 [Katie] -In poverty.

11:23 [Allycia] Yeah, in poverty. It forces people to live with really no assets to be able to spend or save money. So the ABLE account can be a really good resource.

11:29 [Katie] Yup. And then also when people who have a disability that, well when you apply for Section Eight, but this might be another one down the road, it’s like you can’t, just because you make too much to live in section eight or HUD, you sometimes you have to find your own place. Um, like I did, but I don’t get that special extra help. I do it all on my own. So it’s kind of hard. But with this ABLE account you’re able to maybe save some money but also things that you need personally. If you don’t have the cash in hand, it’s always a good backup.

12:08 [Allycia] Yeah and so you can use it as like a savings account. And so I know that we were talking earlier about like wanting to save money and have it in an account that like you don’t use very often. So the temptation isn’t there to just use it all the time. The ABLE account can be a really great way to save.

12:22 [Katie] Great way to save.

12:24 [Allycia] Yeah. All right. Well I think that’s mostly what I wanted to chat about today for the ABLE account.

12:30 [Katie] Well thank you Allycia for having me.

12:32 [Allycia] Thanks. And we will chat again when we do the episode on self-advocacy. So keep an eye out for that.

12:38 [Katie] Oh yeah we’ve been really busy. That might be a longer broadcast than this one.

12:44 [Allycia] It will. Thanks Katie.

12:45 [Katie] You’re welcome. Thanks.

12:50 [Allycia] I wanted to sit down with Katie today and talk about the ABLE accounts because I feel like it’s a really wonderful resource to parents and to caregivers and to people with disabilities who want to learn more about managing their own money and feel more power or control over the cash and the assets that they have in their name instead of fear. Um, I talk with a lot of families everyday who say, I have to stay under this asset limit for social security and medical assistance, but that doesn’t give us any room to save.

13:23 [Allycia] And so either people don’t have very much money because they have to spend it all or they have to spend money on things that they don’t actually need to stay under the $2,000 limit. So the ABLE account can be really great for people as they’re actively saving for their lives. It could also be a really wonderful tool for people who want to save for their retirement or for a trip. So there’s a whole bunch of different ways that you can use the ABLE account. And I also wanted to clarify a few points. In my conversation with Katie, I mentioned that you can set up the able account online at www.savewithable.com. I also wanted to note in addition that you can only set up an ABLE account online or via paper application.

14:09 [Allycia] So if you end up going to your local bank and saying, I want to set up an ABLE account, they’ll probably have no idea what you’re talking about because you can only set it up online or on that paper application because the ABLE account is overseen by the Minnesota Department of Human Services. Because to have an ABLE account you have to have a qualified disability and you can only have one ABLE account to your name. So Katie and I, today were talking about the Minnesota ABLE account where it’s just like a regular checking account. There’s investment options, but you can think of it just as a regular checking account where you get a debit card and you can manage it all online. To qualify for the ABLE account, you have to have had a disability before the age of 26 and that’s the law as it stands right now in November of 2019. The Arc Minnesota is trying to change that law along with other Arcs throughout the nation because it’s believed that whether or not you have a disability before the age of 26 you should still have access to the ABLE account. But right now you have to have had a disability before the age of 26 to be eligible for the ABLE account.

15:19 [Allycia] And then just one more thing about the ABLE account. Since the ABLE account is a checking account in the person’s name and it’s money that belonged to that person at one time, If a person were to pass away and there were still say $10,000 in the ABLE account, any money left over in the ABLE account is subject to a payback clause. So the payback clause means that that $10,000 leftover upon a person passing away that has to go to payback any services that the person got from the state over the course of their life. So that could be a waiver. So if a person was on waivered services or got county services in their lifetime and they had $10,000, once they passed away on the ABLE account, the state would go back and say since we gave you resources for so long, we have claim to this money because it’s money that you had in your name at one point.

16:16 [Allycia] And so that’s just something to consider in the ABLE account. Um, and the ABLE account, I think overall is a really, really wonderful resource. Again, it allows people to save and encourages people to have money in their name, to eventually be able to maybe work their way off of government benefits or to feel more secure in government benefits or to live a better life because they can afford something that is a higher ticket item. So really great resource. Please call The Arc if you have any questions. We also have a YouTube video online about understanding trusts and the ABLE account because these two financial structures can work together really, really well. So this webinar explains how a trust is a pool of money that’s managed by a trustee and then the ABLE account is a pool of money that’s managed by the individual and basically what those differences are and how that works and all of the nitty gritty in that. So you can go onto our website or our YouTube page to find that or call The Arc for more information. And that wraps up our little mini episode today on the ABLE accounts and how it’s a great resource for a lot of families living in Minnesota.

17:32 [Music playing]

17:35 [Allycia] if you would like to chat more about the ABLE account or if you have any questions, please give us a call here at The Arc. Our number is (833) 450-1494. On the next episode of Focus on the Future, we’re going to be talking about how to care for yourself as a caregiver. What are the important notes that you should consider as you are investing your life and your love into caring for somebody else, and managing all the pieces. So next time we will chat about how to take care of yourself as you’re taking care of others. Focus on the Future is a podcast of The Arc Minnesota. Please subscribe to the podcast on your favorite streaming service to stay up to date with all the newest episodes. If you’re listening, please support the podcast and our mission by donating at www.arcminnesota.org/podcast. Our podcast music is composed and recorded by Micah Kadwell. Micah is a talented guitarist from New Brighton, Minnesota, and he also has autism. Thank you, Micah. And Focus on the Future is co-produced by myself and Chloe Ahlf and is engineered by Brent Nelson. Thank you, Chloe and Brent. Have a great day and we will see you next time.