Tax-Advantaged ABLE Accounts See Steady Initial Adoption by Individuals Living with Disabilities or Blindness
Dresher, PA – Ascensus—whose technology and expertise helps millions of people save for retirement, education, and healthcare—has released trends data from its Achieving a Better Life Experience (ABLE) platform, offering a first look into the savings behaviors and growth of this recently created market.
ABLE programs were established following the passage in December 2014 of the federal Stephen Beck Jr., Achieving a Better Life Experience (ABLE) Act to allow people with a disability or blindness to save for the future without jeopardizing their federal disability benefits. ABLE savings accounts allow for tax-deferred investment growth and tax-free withdrawals when savings are spent on qualifying disability-related expenses.* Account contributions can be made by anyone, including family and friends.
“ABLE programs allow people living with disabilities and blindness to save for the specialized care and resources they need,” states Kevin Cox, head of Ascensus’ government savings division. “We’re honored to serve the unique needs of this developing market, currently providing account administration services for 20 of the 40 existing ABLE programs across the U.S.”
Ascensus recently published its Inside Savings Plans report, which features data on the savings behaviors of ABLE account owners across Ascensus-administered programs. The following data points provide a glimpse into the demographics of the ABLE market and how savers are engaging with these new specialized savings vehicles.
- ABLE account owners have built a foundation of savings, with average balances exceeding $4,100 across all age ranges. It’s important to note that most ABLE programs were formally opened for enrollment in 2016, meaning that account owners have had about two years’ worth of contribution opportunities. ABLE accounts also have an annual contribution maximum of $15,000 and are often used for more near-term, day-to-day needs. Considering these key factors, it’s encouraging to see how much savings early adopters have accumulated.
- The ABLE market has been gaining momentum since its recent introduction, with assets in Ascensus-administered accounts totaling over $52,000,000 to date. As of the close of 2017, Ascensus had over $16,000,000 in ABLE assets under administration. This represents 225% growth in assets administered in just under a year. On average, savers on the Ascensus platform set aside $641 with each contribution.
- ABLE account owners are leveraging automatic savings methods. In 2017, 21% of ABLE account owners made contributions via payroll direct deposits or recurring contributions via their bank.
- Savers are making the most of opportunities to “crowdsource” their efforts. An increasing number of ABLE savers are leveraging Ascensus’ Ugift® program, receiving over $500,000 in gifting contributions in the 2017 year.
For additional ABLE savings trends and insights from Ascensus, visit pulse.ascensus.com.
Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit ascensus.com. View career opportunities at careers.ascensus.com.
* Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as applicable state and local income taxes.