My yearly bonus just landed so I’m determining the best way to allocate it. So far my 401k and mega backdoor is fully funded, my HSA will be through ordinary contributions, and I have a 1 year emergency fund (though my industry is particularly volatile right now).
With the expanded eligibility requirements that enable you to open an ABLE account if you became disabled before 46 I now qualify. But I’m not certain where I should prioritize this in the flow.
ABLE accounts seem like a more flexible ROTH since they can be used for many qualified living expenses whenever. But I also have my 2025 back door Roth space still available. My disability has executive function impairment so while I know I can remove the principle from a Roth whenever worry that I won’t have good enough records.
Beyond my personal situation, where do we think the ABLE account should go in the flow?
Where should ABLE accounts go in the flowchart?
byu/WrongImpressionOnly infinancialindependence
Posted by WrongImpressionOnly
3 Comments
ABLE accounts should probably slot in right after maxing HSA but before taxable investing since the tax-free growth on qualified expenses is pretty solid and you get that flexibility for disability-related costs that regular Roth doesn’t cover
Personally, I view my husband’s ABLE account below HSAs but above Roth. Doesn’t matter cause we can fund both.
So my policy is always to prioritize accounts with a more recent deadline. You have, at most, until mid October to fill the backdoor Roth. I would start there.
You could also just fund the able account from your emergency fund. Given the list of allowable expenses, you could certainly withdraw it for most emergencies.