ABLE Account: A Savings Tool to Empower People With Disabilities
An ABLE account can improve quality of life for individuals with a disability — it permits tax-free saving for ongoing expenses without jeopardizing benefits.
If you have a family member with a disability, you’re probably aware that a disabled person’s financial situation can easily become precarious.
The maximum Supplemental Security Income benefit, which is available for low-income individuals who have a disability, is just $967 a month, according to the Social Security Administration. And your loved one may be ineligible for the benefit if they have more than $2,000 in assets.
Achieving a Better Life Experience (ABLE) accounts, created in 2014, allow individuals with disabilities to save for ongoing expenses without jeopardizing their disability benefits.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Anyone who receives payments through SSI or Social Security Disability Insurance (which provides benefits based on an individual’s work history), or who can produce a certification from a doctor stating that their disability is “marked and severe,” can open an ABLE account, as long as their disability was diagnosed before age 26.
Starting in 2026, those whose disability was diagnosed before age 46 will qualify.
Advocates estimate that expanding the age range will make an additional 6 million individuals, including 1 million veterans, eligible for the accounts.
Tom Foley, executive director of the National Disability Institute, says ABLE account funds can be used to improve disabled people’s lives in many ways, including paying for rent or a mortgage, buying a motorized wheelchair or contributing to education costs.
If a college-age beneficiary develops a disability while in school and has unused funds from a 529 college savings plan, they can roll the money into an ABLE account without incurring taxes or penalties.
ABLE account: Taxes and limitations
Contributions to an ABLE account are after-tax (though some states offer tax deductions; see below). But the money grows tax-free, and distributions aren’t taxed if they go toward qualified expenses.
Most plans offer investment portfolios ranging from conservative to aggressive, so account owners can choose one that suits their risk tolerance and time frame.
Anyone can contribute to a disabled person’s ABLE account, including family members and friends, as long as they don’t exceed the maximum contribution, which is $19,000 per person in 2025.
All but four states — Idaho, North Dakota, South Dakota and Wisconsin — offer ABLE accounts to residents. If your loved one lives in one of those four states, they can apply for an account in one of the states that permit non-resident applications.
Tax deductions for ABLE accounts
Some states offer tax deductions for residents who contribute to their own state’s plan. Michigan, for example, allows residents who contribute to its ABLE account to deduct up to $5,000 (or $10,000 for a married couple). Maryland allows residents to deduct up to $2,500 in contributions, or up to $5,000 for joint filers.
You can research state ABLE accounts online.
To apply for an ABLE account, your loved one will need to provide their Social Security number, bank account information and proof of disability. If the beneficiary is unable to manage the account, you can request authority to act as the individual’s representative.
SSI benefits may be reduced or suspended if the account’s assets exceed $100,000, although eligibility can be restored if the balance falls below that amount. If the beneficiary dies and funds remain in the ABLE account, the state may claim the money as reimbursement for the beneficiary’s Medicaid benefits.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
-
How Prices Have Changed in Trump's First YearTrump campaigned on bringing prices down for Americans. Here's where prices stand one year into his second term.
-
New California Wealth Tax for 2026: What's Happening NowState Taxes California has considered taxing wealth before, but the latest proposal seems to be different.
-
Your 5-Step Guide to Discovering Whether a Lawyer Is ShadyResearch shows you can't rely on some state bar websites to vet a lawyer you're considering hiring. Here's how to check out a lawyer before you hire.
-
How Prices Have Changed in Trump's First Year
Trump campaigned on bringing prices down for Americans. Here's where prices stand one year into his second term.
-
Beyond the Bar: Your 5-Step Guide to Discovering Whether a Lawyer Is Shady
Research shows you can't rely on some state bar websites to vet a lawyer you're considering hiring. Here's how to check out a lawyer before you hire.
-
6 Practical Steps to Help Keep Your Student Focused on College Rather Than the Financial StrainToo many students drop out due to financial strain. This plan can help families plan for the costs and get timely aid that sees students through to graduation.
-
Are You the Doer or the Visionary of Your Advisory Practice? Here's How You Can Make the Leap to Chief Vision OfficerThe key is to transition from a tactical "doer" to a strategic "chief vision officer" by building the teams, processes and brand so your practice can grow.
-
How to Plan a (Successful) Family ReunionFrom shaping the guest list to building the budget, here's how to design a successful and memorable family reunion.
-
You've Heard It Before, But This Investment Advice Still Pays Off"Time in the market beats timing the market" ¬— been there, done that, right? But don't write off the underlying advice. There's a reason it's a popular saying.
-
6 Champagne Problems Successful Retirees FaceWhat do you do if your biggest financial threat is simply having too much of a good thing — money?
-
A Portfolio Checklist If You're Planning to Retire in 2027Are you planning to retire in 2027? This portfolio checklist will help put you on the right path.
