Individual Development Accounts
WHAT ARE ASSETS FOR INDEPENDENCE (AFI), INDIVIDUAL DEVELOPMENT ACCOUNTS (IDA), AND WHO CAN HAVE ONE?
The Assets For Independence (AFI) is a program offered by the federal government that helps people who have limited income to save money for important purchases that will help them gain assets over their lifetime. Individual Development Accounts (IDA) are special savings accounts that people use to save the money they need to buy a house, continue their education after high school graduation, or to start their own business. These are assets that can help you improve your life. Everyone wants to have enough money to pay for the things they need in their lives, take care of their families and save for their futures. This is sometimes very hard for people with disabilities to do. It is hard to save money and takes a lot of planning and willpower for all of us. Individual Development Accounts or IDAs are a way to help people to save money
WHAT IS AN ASSET?
Assets are things you own that are part of your wealth. They are possessions that have value to you. A home or a business are assets that this program can help you purchase. If you use this special savings account called an IDA you are saving your money for something special. The money you save can be used to go to college or a vocational school.
HERE IS THE BEST PART!
If you save your money in this special IDA savings account you get more money that matches the amount of money you saved! You get $4 for every $1 you save. This extra money, called a MATCH lets you save money much faster!! For every $1 you put into your IDA account you would have $5 after the match is added. That’s a great deal!
HOW DOES IT WORK?
You set up the IDA which is a special savings account and have it in your name. You put money into your IDA savings account and decide how much you can add every month. You will get information about the smallest amount of money you need to save to still get a match and how long you can keep saving and get the extra matching money. You need to add something to your savings every month to stay in the program. You can miss a few times if you have an emergency and need the money but you have to start saving again as soon as you can. The rule about this will be different depending on your state. You can take the money out of your account when you are ready to pay for school. You will need to take college courses or go to a vocational training program after high school. You have up to 5 years to save and use the money. Taking money out of your savings account is called withdrawing your money. Sometimes people have an emergency that requires them to use savings to pay for the cost. You might be able to use some of your money saved in your IDA to help you with this emergency. For example you may need to go to the hospital unexpectedly and have hospital bills or your car might need repairs.
For more information go to www.IDAresources.org
WHAT MAKES YOU ELIGIBLE?
There are rules that need to be followed to be in the AFI program and have an Individual Development Account (IDA). You can only make a certain amount of money which is called your income. There is a set process to decide if your income is within the allowable amount. This will use information about the poverty level in your state to see if you qualify. If you are part of a household, as when you are married or live with your family the whole household’s income is looked at. Your income that counts towards deciding if you qualify for the AFI IDA program does not include your benefits such as SSI, SSDI, or Medicaid. Staff from MIGIZI can explain this and answer questions about your other benefits. To be eligible you must also have less than $10,000 saved. This is considered one of your assets. There are other things you might own such as a house or a car that are also assets. The worth of the house and 1 car will not be counted to decide if you are eligible for the AFI IDA program. So if you own a house or a car this won’t keep you out of the program.