Ten years ago, Congress passed the Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014, which provided people with disabilities with the opportunity to save money, tax-free, in something called an ABLE account.
Benefits of an ABLE Account
These tax-advantaged accounts can hold up to $100,000 without jeopardizing the beneficiary’s access to federal means-tested public benefits programs such as Supplemental Security Income (SSI) and Medicaid. In addition, the individual with the disability can use these savings to pay for disability-related expenses that benefit them, including basic living expenses, education, assistive technology, transportation, and more.
Today, all but four states, plus the District of Columbia, offer ABLE account programs, which has allowed people with disabilities nationwide to save a total of more than $1 billion since the ABLE Act’s passage.
For many people across the disability community, financial health remains a major concern. Underemployed and often lacking emergency savings, they also tend to face a considerably higher cost of living. At the same time, they must comply with the strict limits that safety-net programs often impose on their savings and assets. Being able to maintain a substantial savings account balance without risking their federal benefits can provide a much-needed cushion.
The annual contribution limit for an ABLE account each year typically goes up in line with the annual gift tax exemption – which, beginning in 2025, will be $19,000, up from $18,000 in 2024.
If you have an ABLE account and are employed, you may be able to deposit thousands of dollars more each year, thanks to the ABLE to Work Act. Unfortunately, this provision is currently set to expire at the end of 2025. Speak with a special needs planning attorney near you to understand the rules and limits on contributions specific to your state.
Another effort currently seeking to support disabled workers is a new piece of proposed legislation, the ABLE Employment Flexibility Act. This bill would allow employers to contribute to the ABLE account of an employee with a disability. Today, many employers typically contribute to their employees’ 401(k) accounts. However, for employees with disabilities, having too much in savings can render them unable to qualify for federal programs on which they rely.
Who Can Have an ABLE Account?
If you acquired your disability before the age of 26, you may be eligible to open an ABLE account. This age limit is changing in 2026, when disability onset age for ABLE account beneficiaries will become age 46, making millions more individuals eligible for these savings accounts.
Anyone, not just the account owner, can deposit funds into a person’s ABLE account.
How to Find an ABLE Account Program in Your State
Review this state-by-state directory of available ABLE account programs near you. In addition, the Social Security Administration website and the ABLE National Resource Center both provide helpful insights on the ins and outs of these types of accounts
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