How an ABLE Account Can Support Financial Security

For many people with disabilities, maintaining financial well-being can be particularly challenging. Inaccessible workplaces, reduced income, health care barriers, and limited options for building savings can all affect a person’s financial security.

An ABLE account is one option that may help. It allows an eligible person with a disability to save and pay for qualified disability expenses without automatically losing eligibility for certain means-tested public benefits, such as Supplemental Security Income (SSI) and Medicaid.

What Is an ABLE Account?

An Achieving a Better Life Experience, or ABLE, account is a tax-advantaged savings account for eligible people with disabilities.

Money in an ABLE account can grow tax-free. Withdrawals are also generally tax-free when the money is used for the account holder’s qualified disability expenses.

An ABLE account can help a beneficiary of a means-tested program such as SSI save more than would ordinarily be allowed under the program’s strict resource requirements. This can provide a financial safety net and reduce some of the stress associated with paying for disability-related needs.

Who Qualifies for an ABLE Account in 2026?

As of January 1, 2026, a person may qualify for an ABLE account if their blindness or disability began before they turned 46. The person does not have to be younger than 46 when the account is opened. The disability must have begun before their 46th birthday.

The individual must also meet one of the following requirements:

• The individual is entitled to benefits based on blindness or disability under SSI or Social Security Disability Insurance (SSDI); or
• The individual has a qualifying disability certification showing that they meet the applicable requirements.

The disability-onset age was previously 26. The expansion to age 46 has made ABLE accounts available to more people with disabilities. The IRS explains the current eligibility requirements in its ABLE account instructions.

How Much Can You Contribute to an ABLE Account?

For 2026, the standard annual contribution limit for an ABLE account is $20,000. This is the combined limit for contributions from the beneficiary, family members, friends, an employer, a trust, or other contributors.

Certain account owners who are working may be eligible to contribute additional income under the ABLE to Work provisions. The amount depends on the account owner’s compensation and whether the person participates in certain employer-sponsored retirement plans.

Because contribution limits can change, account owners and their families should verify the current limit before making contributions. The ABLE National Resource Center provides current contribution-limit information.

What Can ABLE Account Funds Pay For?

Money held in an ABLE account must be used for the account holder’s benefit. It may pay for qualified disability expenses such as:

• Basic living expenses
• Education and training
• Housing expenses
• Transportation
• Employment support
• Health care
• Assistive technology
• Financial management
• Legal fees
• Other expenses related to the person’s disability

The expenses do not have to be medical in nature. However, they must relate to the eligible person’s blindness or disability and help maintain or improve that person’s health, independence, or quality of life.

How Does an ABLE Account Affect SSI and Medicaid?

An ABLE account allows an eligible person to save money without all of the account funds being counted under the usual SSI resource rules.

The Social Security Administration excludes up to and including $100,000 in an ABLE account when determining the beneficiary’s countable resources for SSI.

If the balance above $100,000 causes the beneficiary to exceed the SSI resource limit, SSI payments may be suspended. The payments can be reinstated when the account balance no longer causes the person to exceed the resource limit and the person otherwise remains eligible.

The $100,000 figure is not necessarily the maximum amount an ABLE account can hold. The total account limit varies by state program and may be considerably higher. However, funds above $100,000 can affect SSI eligibility.

What Can Make an ABLE Account Difficult to Use?

Despite the benefits of ABLE accounts, financial hardship can prevent some eligible individuals from fully using them.

Some state ABLE programs charge annual account-maintenance fees or require minimum opening contributions. These costs may create another barrier for people who already have difficulty putting money aside.

Many individuals cannot contribute enough money consistently to build meaningful savings. While family members, friends, and others can contribute to an individual’s ABLE account, many families have trouble putting together enough money to take full advantage of the account.

ABLE accounts can provide a useful savings tool, but they do not eliminate the financial barriers faced by many people with disabilities.

Why Don’t More Eligible People Have ABLE Accounts?

A report on the financial health of people with disabilities found that awareness of ABLE accounts was severely lacking.

The report was compiled by the Harkin Institute, National Disability Institute, and Financial Health Network. It surveyed people with disabilities about their spending, saving, borrowing, and planning habits to evaluate their financial resilience.

The report found that only 10 percent of working-age people with disabilities were financially healthy. Meanwhile, one-third were categorized as financially vulnerable, compared with 12 percent of working-age people without disabilities. These individuals may have significant debt, little or no emergency savings, and may be living paycheck to paycheck.

The report also found that:

• In 2022, only 120,000 of the estimated 8 million eligible beneficiaries had opened an ABLE account.
• Less than 1 percent of eligible survey participants had an ABLE account, and all of those accounts held less than $10,000.
• Ninety-three percent of survey respondents said they were unfamiliar with ABLE accounts.

The report noted that ABLE accounts were also unfamiliar to many service providers who work with people with disabilities. Those providers could offer an important link to information and access.

These figures reflect the report’s findings at the time it was published. The number of people eligible for ABLE accounts has since expanded because the disability-onset requirement increased from age 26 to age 46 in 2026.

Is an ABLE Account Right for Your Special Needs Plan?

An ABLE account can help an eligible person with a disability save for qualified expenses while protecting access to certain public benefits. However, it is not the right or only planning tool for every individual or family.

Contribution limits, SSI rules, state program fees, account balances, and the beneficiary’s other resources should all be considered. An ABLE account may also need to be coordinated with a special needs trust and the family’s broader estate plan.

To learn more about how to establish an ABLE account, contact Andre O. McDonald, a Howard County, Montgomery County, and District of Columbia estate planning, special needs planning, and Medicaid planning attorney.

Call 443-741-1088, 301-941-7809, or 202-640-2133 to get answers to your special needs planning questions and schedule an appointment.

DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL, INSURANCE, OR TAX ADVICE.