Living with a disability carries real financial weight. Households affected by disability need roughly 28 percent more income to maintain the same standard of living as those without, according to the National Disability Institute. Barriers to employment compound the challenge further. ABLE accounts, created by federal law in 2014, give eligible individuals with disabilities a way to build savings, cover disability-related expenses, and stay qualified for critical public benefits. Since the program launched, account holders have saved over $550 million.
Who Can Open an ABLE Account?
To be eligible, the onset of a person's disability or blindness must have occurred before age 26. Starting in 2026, that threshold rises to age 46, opening the program to a much broader group of people.
Beyond that, eligibility extends to several groups: those receiving disability insurance benefits, childhood disability benefits, or widows or widowers with disabilities; individuals who meet the disability or blindness criteria for SSI but whose income or resources exceed SSI's limits; and others who can submit a certification of disability signed by a physician, stating that a qualifying physical or mental impairment caused marked and severe functional limitations with an onset before age 26. The Social Security Administration's List of Compassionate Allowances Conditions also outlines additional qualifying disabilities.
What Can an ABLE Account Pay For?
ABLE accounts can only be used for qualified disability expenses (QDEs), defined as expenses that support the account holder's health, independence, or quality of life. QDEs cover a broad range of needs, including:
- Education and employment training
- Personal assistance and disability management services
- Medical care and health support
- Food
- Housing
- Transportation
- Financial management and administrative services
These funds are meant to supplement, not replace, other support programs like SSI and Medicaid.
Contribution Rules
Anyone can contribute to an ABLE account, including family members, friends, employers, and the account holder. The annual contribution limit follows the federal gift tax exemption, which is $18,000 for 2024. Funds in the account can be invested and accrue interest.
Beneficiaries who work but do not participate in an employer retirement plan may be eligible to contribute an additional amount above the standard limit. The Social Security Administration provides further guidance on the parameters for those additional contributions.
How ABLE Accounts Interact With Public Benefits
SSI recipients face strict income and asset limits: $2,000 in countable resources for an individual and $3,000 for a married couple in most states. Money in a regular bank account counts toward those limits. Money in an ABLE account generally does not, up to $100,000. If the balance exceeds that threshold, SSI benefits are suspended until the balance drops back below it.
Medicaid eligibility is even more protected. ABLE account balances do not affect Medicaid qualification at any amount, even above $100,000.
Tax advantages worth knowing: Like a 529 college savings plan, ABLE accounts allow savings to grow tax-free. Contributions are not tax-deductible, but investment earnings are never taxed when used for qualified disability expenses.
Making ABLE Accounts Part of Your Broader Plan
An ABLE account works best when it fits within a larger financial strategy. For many families, that means pairing it with a special needs trust: the ABLE account handles day-to-day and basic living expenses, while the trust covers larger needs that public benefits do not address.
A special needs financial planner can help you understand how an ABLE account interacts with your current benefits, your estate plan, and any other planning tools already in place.