ABLE Account Decision Guide Series

ABLE Accounts and Working People with Disabilities

Retirement Insurance Benefits (RIB) and ABLE Accounts for the Working Person:

A person who receives an SSI benefit, based upon disability from Social Security, may at some point in time become entitled to a retirement benefits from SSA and be required to accept this benefit because it is means-tested. This may be as early as age 62 for a person who receives SSI, but becomes entitled to a retirement benefit.

Other individuals, such as those who have never received a disability-based benefit from SSA or those who receive an SSDI benefit, may qualify and choose to receive a reduced retirement benefit from SSA beginning at age 62 or any month through or after their full retirement age. The SSA earnings limit for individuals receiving a retirement benefit are different than the limits for those receiving a disability benefit and are described in: https://www.ssa.gov/pubs/EN-05-10069.pdf. It may or may not be to a person’s advantage to apply for and receive a retirement benefit as early as age 62, depending upon their individual circumstances. No matter what benefit is received, funds may be saved in the ABLE account.

Working individuals who receive an SSDI benefit, and are eligible for a retirement benefit, are converted automatically to a retirement benefit at their full retirement age. At full retirement age, they are in the best position to save additional funds in an ABLE account without any amount of earnings affecting benefits.

Although a person may retire at age 62, if they delay receiving their benefit beyond their full retirement age, their benefit may increase up to 8 percent for each year worked, up to age 70. Working to a person’s fullest ability and beyond full retirement age may help to make it possible for a person to save more money within their ABLE account for future qualified disability expenses, including paying for long-term care services, funeral and burial expenses. See SSA Retirement Planner: https://www.ssa.gov/benefits/retirement/planner/agereduction.html.

Does the individual work and/or are some or all of the earnings and/or benefits available to save in the ABLE account?

→Yes, ABLE savings will not be a countable resource for Medicaid or Medicare.

→No, the discussion in this section will not be relevant to the person.

SSI payments are means-tested. Income, earned and unearned, will affect the amount of the payment SSI payment even when it is deposited into the ABLE account. But, once it is saved in the ABLE account, resource counting rules will apply. An ABLE account is not counted as a resource up to $100,000.

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Note: Our ABLE Decision Guide Series is designed as an aid to decision making as it relates to establishing and using an ABLE account. This document does not cover every possible issue related to the topic and is not a substitute to more in-depth analysis that may be required in some cases.