Why were ABLE accounts created?

Many needs-based benefit programs have strict resource limits. Historically, that could make it difficult for a person with a disability to build meaningful savings without jeopardizing benefits. Congress created ABLE accounts in 2014 to provide eligible individuals with a special savings and investment vehicle. Money can grow tax-free, and withdrawals are federally tax-free when used for qualified disability expenses.

Who can qualify?

Beginning in 2026, the disability or blindness generally must have begun before age 46. Eligibility can be established through qualifying SSI or SSDI entitlement, or through disability certification meeting the applicable federal standard. The account can be opened later in life; the key is the age when the disability began. The individual with the disability is the account owner, although an authorized person may establish and manage the account when appropriate.

How much can be contributed?

For 2026, the general aggregate annual ABLE contribution limit is $20,000. Certain employed ABLE beneficiaries may be able to contribute additional compensation above that amount, subject to statutory limits and retirement-plan rules.

Contributions can come from the beneficiary, family members, friends and other permitted contributors. Contributions are generally not federally income-tax deductible, although state tax treatment varies.

What can the money pay for?

The definition of a qualified disability expense (QDE) is intentionally broad. It can include education, housing, food, transportation, employment training and support, assistive technology, personal support services, health care, prevention and wellness, financial management, legal fees, funeral and burial expenses, and other expenses that help improve the beneficiary's health, independence or quality of life.

Why can an ABLE account be so valuable?

For Supplemental Security Income (SSI), the first $100,000 held in an ABLE account is generally disregarded as a resource.

If the ABLE balance above $100,000 causes the beneficiary to exceed the SSI resource limit, SSI cash payments may be suspended; Social Security states that Medicaid can continue as long as the person otherwise remains eligible. This special treatment can make an ABLE account very different from simply putting money into an ordinary savings or investment account in the beneficiary's name.

A few important details:

• Only one ABLE account.

An eligible beneficiary generally may have one ABLE account at a time.

• Housing requires care.

For SSI recipients, an ABLE distribution for housing should generally be spent in the same month; retained housing distributions can affect resource treatment.

• Investment choices and fees vary.

State-sponsored ABLE programs can differ in investment options, checking/debit features, fees and state tax benefits; many programs accept out-of-state residents.

• Keep records.

Good documentation of qualified disability expenses is important for tax and benefit purposes.

• Medicaid estate recovery may apply.

After the beneficiary's death, a state may in some circumstances seek reimbursement for certain Medicaid benefits paid after the ABLE account was established, after permitted expenses are paid.

ABLE account or special needs trust?

They are not necessarily substitutes. An ABLE account can provide day-to-day flexibility and tax-advantaged growth, while a properly designed special needs trust may be appropriate for larger inheritances or more complex planning. Families dealing with significant assets, estate planning or public-benefit eligibility should coordinate their financial, legal and tax advice before moving money.

The takeaway:

An ABLE account can be an exceptionally useful planning tool for the right person: it can create a place to save, invest and pay qualified expenses while preserving important benefit protections. The rules are detailed, however, so eligibility, contributions, distributions and coordination with SSI, Medicaid and estate planning should all be reviewed carefully.

Advisory Services offered through LexAurum Advisors, LLC, an SEC-registered investment advisor.

Why emotions can affect saving

Money can trigger anxiety, fear, guilt, embarrassment, optimism, or even a desire for immediate comfort. The American Psychological Association notes that people sometimes respond to money anxiety by avoiding their finances altogether. Avoidance may feel easier in the moment, but it can make financial problems - and the anxiety surrounding them - worse over time.

Behavioral research also shows that people naturally place extra weight on what feels rewarding today compared with a benefit that may be years away. That tendency, often called present bias, can make spending today feel more compelling than saving for a distant goal. This does not mean every savings problem is emotional: income, debt, housing costs, health expenses, and other real financial constraints matter greatly.

The savings habit matters

Consumer Financial Protection Bureau research found a strong relationship between having a regular saving habit and financial well-being. Consumers who reported that they did not save were more likely to report difficulty paying bills, and that pattern appeared across income levels. The CFPB also found that people with little emergency savings can experience greater financial strain and a lower sense of control over their financial lives.

A practical way to break the cycle:

1. Make the first goal small.

A modest, repeatable amount can be more useful than waiting until you feel able to save a large amount.

2. Automate it.

Move money to savings automatically on payday or on a regular schedule so the decision does not have to be made over and over.

3. Separate saving from spending.

A dedicated emergency or goal-based account can make the money less tempting to use for everyday purchases.

4. Name the emotion.

When you want to abandon the plan, ask what is driving the decision: stress, fear, boredom, convenience, or a true financial need?

5. Review without judgment.

A monthly check-in can turn saving from an emotional event into a routine financial process.

The takeaway

If saving has always been difficult, the answer may not be to simply "try harder." A better approach may be to understand the behavior behind the money, reduce the number of decisions you have to make, and build a system that makes saving easier. Even a small, consistent savings habit can be an important first step toward greater financial security.

Advisory Services offered through LexAurum Advisors, LLC, an SEC-registered investment advisor.

Four practical ways to build stronger credit:

1. Pay bills on time. Payment history is the largest general component of a FICO Score. Consistently paying obligations by their due dates helps establish a positive credit history. If you have had problems in the past, a new pattern of on-time payments can help over time.

2.Reduce revolving balances. How much of your available revolving credit you use matters. For example, a $9,000balance on a card with a $10,000 limit represents very high utilization. Paying down credit-card balances can improve the information being evaluated in the “amounts owed” category.

3.Avoid unnecessary new accounts. Opening several accounts in a short period can signal additional risk. Do not take on debt you do not need simply because someone says opening more accounts will automatically improve your score.

4.Think before closing older accounts. Length of credit history is another scoring factor. An older account that has been responsibly managed may contribute to the age of your credit history. That does not mean every old account should stay open - especially if it has fees - but understand the potential impact before closing it.

Check your credit reports for errors

Review your credit reports for accounts you do not recognize, incorrect balances, payments incorrectly reported as late, outdated or inaccurate information, and possible signs of identity theft. If information is wrong, you have the right to dispute it with the credit bureau and the company that furnished the information.

Official free credit reports: AnnualCreditReport.com

Be careful with “credit repair” promises

The Federal Trade Commission makes an important distinction: accurate and current negative information generally cannot be legally removed simply because you pay a credit-repair company. Anything a credit-repair company can legally do for you, you can generally do yourself for little or no cost.

Warning signs include a company that:

• demands payment before providing credit-repair services;

• guarantees a specific score increase or promises to remove accurate negative information;

• tells you not to contact the credit bureaus directly;

• encourages you to dispute information you know is accurate; tells you to lie on a credit application or file a false identity-theft report;

• or Grant Marshall Retirement and Wealth Planning | Consumer Education Series promises to create a “new credit identity.”

The bottom line

Think improvement, not instant repair. There is no single action that guarantees a particular score increase. For most consumers, the fundamentals are straightforward: pay bills on time, reduce revolving debt, avoid unnecessary new debt, review credit reports for mistakes, dispute legitimate errors, and give good financial habits time to work.

Advisory Services offered through LexAurum Advisors, LLC, an SEC-registered investment advisor.

Minimum limits may not be enough

Every auto policy has liability limits, and homeowners policies normally include personal liability protection. But a legal minimum or a low policy limit is not the same thing as an adequate amount of protection. A serious auto accident can involve medical bills, lost income, rehabilitation, property damage and legal expenses. If a covered judgment or settlement exceeds the amount your policy will pay, the remaining exposure may become your responsibility, subject to applicable law.

Why this deserves another look today

Liability claim costs have been under pressure from more than ordinary inflation. Swiss Re Institute describes social inflation as growth in insurance claim severity beyond what can be explained by economic factors alone. Its research points to factors such as larger litigation awards, increased access to litigation funding, changing legal and social trends, and legal advertising. Swiss Re estimated that social inflation increased U.S. liability claims by 57% over the decade studied and reached an annual peak of 7% in 2023. That does not mean every accident becomes a lawsuit, nor does it prove that attorney advertising by itself causes more lawsuits. It does mean that the potential cost of a serious liability claim deserves attention when deciding how much protection to carry.

Think beyond your current bank balance

Liability protection is especially important for households that have accumulated assets or have meaningful future income to protect. Your review should consider savings and investments, home equity, rental property, household income, young or inexperienced drivers, recreational vehicles, a swimming pool, pets, entertaining at home, volunteer activities and other circumstances that can increase liability exposure.

What about an umbrella policy?

A personal umbrella policy generally provides an additional layer of liability coverage above qualifying underlying policies such as auto and homeowners insurance. The Insurance Information Institute notes that an umbrella can help when a covered judgment exceeds the liability limit of an underlying policy, and may also cover certain personal liability exposures not covered by the underlying policy. Insurers typically require specified minimum underlying limits before an umbrella can be purchased.

The takeaway

Liability insurance is one of the places where buying only the minimum can create a large gap between what is insured and what is at risk. As your income, assets and lifestyle change, your liability limits should be reviewed as well. A few minutes spent reviewing those limits today may prevent a major financial problem after an accident tomorrow.

Advisory Services offered through LexAurum Advisors, LLC, an SEC-registered investment advisor.

Beginning with tax year 2025 and continuing through 2028, eligible workers may claim new deductions for qualified tips and qualified overtime compensation. The deductions are available whether you itemize or take the standard deduction.

No Tax on Overtime: what is actually deductible?

For qualified overtime, the deduction generally applies only to the overtime premium - not the entire overtime paycheck. The overtime must be compensation required under Section 7 of the Fair Labor Standards Act (FLSA). Overtime that is paid only because of a union contract, employer policy, state rule, or other arrangement may not qualify if it is not required under the federal FLSA.

Example: A worker earns $20 per hour and receives time-and-a-half, or $30, for 10 overtime hours. Total overtime pay is $300. The regular-pay portion is $200; the extra “half-time” premium is $100. Generally, the $100 premium - not the full $300 - is the amount that may qualify for the deduction.

Annual limit: Up to $12,500 of qualified overtime compensation, or up to $25,000 on a married joint return.

Income phaseout: The deduction begins to phase out when modified adjusted gross income (MAGI) exceeds $150,000 for most filers or $300,000 for married couples filing jointly.

Does overtime become completely tax-free?

No. Qualified overtime compensation is still generally treated as wages and remains subject to Social Security and Medicare taxes. Federal income-tax withholding may also still occur during the year; the deduction reduces.

Advisory Services offered through LexAurum Advisors, LLC, an SEC-registered investment advisor.