OK STABLE accounts and 529 College Savings Plans

The Stephen Beck Jr. Achieving a Better Life Experience was signed into law on December 19, 2014. Oklahoma launched the OKSTABLE Program on May 31, 2018.

An OKSTABLE Account is an investment account available to eligible individuals with disabilities. OKSTABLE Accounts allow individuals with disabilities to save and invest money without losing eligibility for certain public benefits programs, like Medicaid or Supplemental Security Income. OKSTABLE accounts are kind of like a savings account, kind of like a special needs trust and kind of like a 529.

How are 529 accounts and ABLE accounts alike?

A 529 plan is a tax-advantaged account that can be used to pay for qualified education costs, including college. 
An ABLE account is a tax advantaged account and can be used to pay for qualified disability expenses which can be related the person’s disability helps maintain or improve health independence or quality of life.

Some kids with 529 plans who have a disability may not go to college. 

Tori is a Norman resident and a mom of a son who attends Norman High School. Tori’s son recently turned 18 and has a diagnosis of autism. Tori was asked why she would think about using OK STABLE accounts when her son currently has a 529 college savings plan.  
“When we first got his 529 plan, he was a youngster and we had ambitions of him attending college.”  
Tori continued, “As he got older and was approaching 18, his disabilities were still pretty significant, and we started investigating other plans that wouldn’t impact his services like his SSI and Medicaid.” 
She said, “We were told to look at OKSTABLE accounts.” 
With the STABLE account option, Tori’s son can pay for college if he still chooses to go or he can pay for any other expense that is qualified – which includes anything for health, independence and quality of life. 

The STABLE program outline

529 College Savings Account and 529A ABLE accounts are similar in that they both help to achieve financial readiness for future expenses, both have investment options, and both have unique tax advantages” explains STABLE Account Deputy Director Doug Jackson, “both are good tools.” 

For a person with a disability, an ABLE account allows money to be used for broader spending, which includes all expenses related to health, independence, and quality of life. This is especially important if a person with a disability has money in a college savings account but does not plan on spending money in ways the college savings account allows.

“If this is the case”, states Jackson, “a rollover from a college savings account to an ABLE account allows the money to be used on a broader range of expenses without being penalized.” 
Jackson reflected, “The ability to rollover a college savings account into an ABLE account provides one more way to make money work for the person with a disability.”

For information about OKSTABLE accounts, go to okstable.org 
OKSTABLE minutes are videos about OKSTABLE accounts. To view a video on 529 rollovers go to youtube.com. You may also contact Ellyn Novak Hefner ChSNC at 405-640-9408 or ehefner@financialguide.com