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First advisor-sold ABLE plan helps individuals with disabilities save for a brighter future
LOS ANGELES, July 17, 2018 — American Funds, a family of mutual funds from Capital Group, one of the world’s largest investment management firms, announced the launch of ABLEAmerica®, a new tax-advantaged savings plan, the first ABLE plan available through financial advisors for individuals with disabilities and their families.
According to National Disability Institute (NDI), approximately 8 million Americans with disabilities are eligible for ABLE, but only 20,000 accounts have been opened across the country as of the end of Q1 2018 according to Strategic Insight. The Achieving a Better Life Experience (ABLE) Act allows individuals with disabilities and their families to invest in a tax-advantaged account, provided the account is used to cover qualifying disability expenses incurred to maintain or improve health, independence or quality of life for eligible individuals.* American Funds is the first to offer a financial advisor-sold ABLE plan nationwide.
“People living with disabilities may face an array of financial challenges that over time can create a significant financial burden on households,” said Reagan Anderson, senior vice president at Capital Group. “A skilled financial advisor can help individuals and families plan for a more secure financial future. Our hope is that opening an ABLEAmerica account can help these individuals and families, working with an advisor, pay for current or shorter term expenses and save for a better future tomorrow.”
In general, ABLEAmerica accounts are available to U.S. citizens and permanent residents with a disability or blindness that occurred before the age of 26. Financial advisors can assist eligible individuals open ABLEAmerica accounts and can also help individuals with disabilities and their families create savings and investing plans for long-term financial health.
“We are thrilled to introduce the first advisor-sold ABLE plan with our partners at Capital Group,” said Mary Morris, CEO of Virginia529, the agency that also administers the direct-sold ABLEnow program. “Together, Virginia529 and Capital Group launched the national, advisor-sold CollegeAmerica education savings program in 2002. Trusted by more than one million families, CollegeAmerica has grown to be the largest 529 program in the country. We have similar expectations that ABLEAmerica will help Americans with disabilities reach their financial goals with the help of an advisor to enhance independence and quality of life.”
For an ABLE account, qualified disability expenses include, but are not limited to, the beneficiary’s basic living expenses, housing, health and wellness, transportation, education, employment training and support, assistive technology, financial management, professional services and legal fees. For the 2018 tax year, the annual contribution limit is $15,000. Each account is subject to a $500,000 account maximum, after which no additional contributions will be accepted. Accounts that have reached the account maximum may continue to accrue earnings.
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*If withdrawals are used for purposes other than qualified disability expenses, the earnings will be subject to a 10 percent federal tax penalty in addition to federal and, if applicable, state income tax.
About Capital Group
Since 1931, Capital Group, home of the American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. As of December 31, 2017, Capital Group manages more than $1.7 trillion in equity and fixed income assets for millions of individual and institutional investors around the world.
© 2018 Capital Group. All rights reserved.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and ABLEAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. ABLEAmerica is distributed by American Funds Distributors, Inc. and sold through unaffiliated intermediaries.
Depending on your state of residence, there may be an in-state plan that provides state tax and other state benefits not available through ABLEAmerica. ABLEAmerica is sponsored by Virginia529℠.