#1 is now on either SSI or SSDI or both. Yeah, we’re not sure. Might even have changed. This is a lot weirder than I expected.
There is, with one or the other, apparently a peculiar incentive for caregivers to retire at 62 rather than, say, 67 (something to do with family Social Security caps and spouses). There’s also something in there about Medicare with MA Backup after two years on SSDI, claims that it’s best to do at least one year of SSI before SSDI, 9 month income averages, retroactive payments that can be clawed back and so on.
The accounting is interesting — trying to stay below income and asset caps.
With SSI/SSDI we can get an ABLE 529A account so that he can save without running over his asset caps. The funds can only be used for things that improve health/mobility/function — but that’s could cover a lot of ground. Maybe mobile data services? Fitness services? Golf gear? Bicycle?
You are not going to find any 529 ABLE plan with no annual account fee and expense ratios of 0.1%, certainly for non-residents. I call the reason for this the "529/HSA Effect". While they might be quite popular among Bogleheads, only a distinct minority of the population takes advantage of either of those plans. With volume comes competition and lower costs. Now consider the minuscule population eligible for 529 ABLE accounts. If they hadn't been smart and piggy backed on Section 529, they would be even more expensive.
ABLE plans will have the same pattern as the majority of HSA accounts. Their owners will be making a number of withdrawals throughout every year such as by a debit card. Compare this to retirement accounts, where most withdrawals only happen in retirement and then maybe once a year. This adds significant administrative costs.
529 plans, especially ABLE accounts can only be administered by a state. When does a state see money and not figure out a way to skim off the top. The dirty little secret is that a significant portion of program management fees goes to the state. For example, Maryland and Oregon take 0.30% in administrative fees themselves in their 529 ABLE plans.
The best I have seen so far is LA ABLE for Louisiana state residents only. No annual fee, no program management fee and 0.07%-0.15% for six Vanguard funds, including the four LifeStrategy Funds. There is a state alliance of GA, KY, MO, NH, OH, SC, and VT that offers funds with asset based fees of 0.31%-0.34% for those state's residents (0.57%-0.60% non-residents).
For non-residents the National ABLE Alliance of AK, CO, DC, IL, IA, IN, KS, MN, MT, NC, NV, PA and RI. Offers funds with asset based fees of 0.34%-0.38%. Their program management management fee is 32% and I'm sure the states gets a significant chunk of that. The underlying expense ratios are 0.02%-0.06% (based on fixed portfolios using Vanguard, Schwab and iShares funds/ETFs). They have a $15 ($11.25 e-delivery)/qtr account fee.
The best plan for non-residents based on cost might be Tennessee's ABLE TN, offering Vanguard and DFA funds with asset based fees mostly in the range of 0.35%-037% (Wellington at 0.35%) with no account fees. As always the devil is in the details. E.g. the plan does not offer a debit card.
Do your own due diligence. You can check all the available state 529 ABLE plans here. 529 ABLE Accounts
Ugh. Much higher fees than I’d hoped for.
We’re working on the special needs trust. We’ll probably use Vanguard to hold funds, have to dust off old Trust documents to create the trust. Good discussion on Trust and home purchases here.