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Fidelity Investments revealed on Wednesday its own version of a special type of savings plan for disabled people, entering the still-young market for the accounts.
Congress passed a law in 2014 that enabled states to set up the plans, known as ABLE accounts, which are meant to help disabled people and their families save money for housing, transportation, and other items related to the disability. The investment earnings from the plans are not subject to federal taxes, similar to 529 college-savings plans.
To date, 20 states have set up ABLE programs, according to the ABLE National Resource Center. Fidelity is managing Massachusetts’ version of the plan, which is set to be unveiled by Gov. Charlie Baker at a Wednesday press conference. Though offered through the state, the plan will be available to disabled people across the country. Consumers can open and make changes to their account on Fidelity’s website.
Fidelity’s entry is sure to make a splash in ABLE plan market. Programs in most other states are managed by either the states themselves or firms that are significantly smaller than Fidelity. Some states offer products from Fidelity competitors BlackRock, Charles Schwab and Vanguard, but those companies aren’t managing the programs themselves.