BOSTON — May 2018 marked the first anniversary of the introduction of the Fidelity Attainable Savings Plan.SM, a tax-advantaged ABLE savings plan offered by the Massachusetts Educational Financing Authority (MEFA) and managed by Fidelity, available nationwide to individuals with disabilities and their families. Fidelity, in conjunction with MEFA, was the first firm of its size to introduce an ABLE savings plan and recently enhanced its offering to help plan participants take advantage of the 2017 tax law changes allowing families the ability to transfer 529 funds into an ABLE account. In the first year since its launch, the Attainable Savings Plan has grown to be one of the largest plans in the country.1
"Fidelity is addressing a growing and critical need for the millions of Americans living with a disability, and the people who provide care for them," said Melissa Ridolfi, vice president of Retirement and College Products at Fidelity. "For many families, this means facing the unique financial challenges that come with planning for the lifetime care of a loved one with a disability."
The plan is designed to help individuals with disabilities and their families save in a way they couldn't before, by helping them save for their disability expenses without jeopardizing eligibility for certain federal benefits. Families can benefit from the plan's tax-advantages today, while helping to build a saving and spending tool for their family members who will benefit from it later in life.
How the Attainable Savings Plan Works
The Attainable Savings Plan, available to eligible individuals who have been diagnosed with a significant disability prior to the age of 26, provides an easy and accessible way to invest savings in a tax-advantaged account. No federal income tax will be owed on investment earnings made in the account if the money is used to pay for qualified disability expenses. Qualified disability expenses are any expenses for the benefit of the eligible individual in maintaining or improving his or her health, independence or quality of life. These expenses include, but are not limited to, education, housing, transportation, employment, training and support, assistive technologies and related services, personal support services, or health and basic living expenses.
"We encourage individuals with disabilities and their families to learn more about the Attainable Savings Plan," said Tom Graf, MEFA's Executive Director. "This program is a great tool to improve the quality of life for so many people by allowing individuals to help manage their finances, increase personal savings, and plan for the future, all while maintaining their rights to certain federal benefits. MEFA is proud to make this important resource available not only to the people of Massachusetts, but nationwide through our relationship with Fidelity."
Attainable Savings Plan accounts also allow individuals and families to accumulate money while preserving their eligibility to receive certain federally means tested benefits. Those with disabilities often depend on a wide variety of federal benefits to help with health care, food and housing. While eligibility for these benefits has placed restrictions on savings in the past, money saved in an ABLE account is largely exempt from this restriction. Attainable Savings Plan accounts do not impact Medicaid benefits and balances below $100,000 do not impact Supplemental Security Income (SSI) benefits.2
Additional advantages offered by an Attainable Savings Plan account include:
- Available nationwide: Fidelity and MEFA are proud to offer the plan to eligible individuals who reside anywhere in the country.
- Easy to open: Accounts can be opened with a minimum of just $50 and contributions can be made online. One Attainable Savings Plan account is permitted per eligible individual.
- Anyone can contribute: Contributions can be made by anyone toward the 2018 annual contribution limit of $15,000 per account. And now, under recent tax law changes, working designated beneficiaries with employment income may contribute an additional amount up to the lesser of the designated beneficiary's compensation for the taxable year or an amount equal to the Federal Poverty Level for a one-person household ($12,060 in 2018).
- Opportunity to help grow your savings: The plan offers a selection of eight low-cost professionally managed investment portfolios to help support differing saving and investment objectives.
- Ready access to funds: Ability to transfer funds electronically at any time to another Fidelity account or outside bank account. Owners can also connect their account to a Fidelity Cash Management Account to help simplify managing disability-related expenses with a debit card, free ATM access, and free check writing.
- Ability to transfer 529 savings into an Attainable account: Recent tax law changes allow investors the ability to move money from a 529 account into their Attainable Savings Plan account. 3
Resources to Learn More
Fidelity offers a variety of resources to learn more about the Attainable Savings Plan and how it can benefit individuals and families affected by disabilities. Fidelity's Viewpoint article, "Saving for a loved one with a disability," showcases examples of how families can use the plan to help navigate the eligible individual's needs and plan for his or her future. Additional information about how to open and manage an Attainable Savings Plan account can be found online at Fidelity.com/attainable, or by calling Attainable Savings Plan Specialists at: 844-458-2253 (TTY/TTD: 800-544-0118).
About Fidelity Investments
Fidelity's mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $6.9 trillion, including managed assets of $2.5 trillion as of April 30, 2018, we focus on meeting the unique needs of a diverse set of customers: helping more than 27 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients' money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.
MEFA is a not-for-profit state authority, not reliant on state or federal appropriations, established under Massachusetts General Laws, Chapter 15C. MEFA's mission, since its founding in 1982, has been to help Massachusetts students and families access and afford higher education and reach financial goals through education programs, tax-advantaged savings plans, low-cost loans, and expert guidance. All of MEFA's work aligns with the ever-present goal to support the independence, growth, and success of Massachusetts students and families. Visit mefa.org to learn more or follow MEFA on Twitter @mefatweets and on Facebook at mefaMA.