How a new savings account for people with disabilities works

A new type of savings vehicle, known as an ABLE account, is allowing people with disabilities to save more money for the first time. That's because the accounts allow them to save without losing much-needed government benefits, such as Supplemental Security Income monthly payments or Medicaid health care. The accounts are run by states and are similar to 529 college savings plans.

Here's more on how ABLE accounts work:

WHO QUALIFIES TO OPEN AN ACCOUNT?

U.S. citizens, or legal residents, who had a disability before their 26th birthday. The account can be opened at any age. Parents can open the account for their children, but the person with a disability must be the account owner.

WHICH STATES OFFER ABLE ACCOUNTS?

So far, 16 states. They are: Alaska, Florida, Illinois, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, North Carolina, Ohio, Oregon, Rhode Island, Tennessee and Virginia. About 10 more states are expected to launch accounts this year. The ABLE National Resource Center's website, ablenrc.org , keeps track of the states that offer a plan.

DO I NEED TO LIVE IN A CERTAIN STATE?

No, many of the state accounts are open to non-residents of the state. However, some states offer special tax benefits for residents. If you open an ABLE account at one state, you can switch it to another state's plan.

HOW DO I SIGN UP?

Online. Each state has a website for their plans. And each state has a different name for their plans. In Oregon, for example, it's called an ABLE For All Savings Plan and in Virginia it's called ABLEnow .

HOW MUCH CAN I SAVE?

$14,000 a year, and friends and family can contribute. Those that have more than $100,000 in the account will lose Supplemental Security Income payments until the account goes below that amount. States typically limit the amount that can be saved at about $300,000.

WHAT CAN I SPEND THE MONEY ON?

Any expenses that improve the life, independence or health of the person with disabilities. That can mean rent payments, school tuition, medical expenses and other costs.

WHAT ARE THE TAX BENEFITS?

Earnings grow without being taxed. Some states offer tax benefits to residents.

ARE THERE FEES?

Yes. You'll need to check with each plan, as fees differ from state to state. Some have maintenance fees of $15 every three months, or $60 a year. Plus, there are fees -- usually a small percentage -- if the money is invested in an index fund. The ABLE National Resource Center's website has a tool that can help you compare each state's account offering at ablenrc.org/state_compare .

WHAT HAPPENS IF THE ACCOUNT HOLDER DIES?

The state can claim any leftover money as payback for care paid by Medicaid after the ABLE account was opened.