When Jordan turned 18, her parents wanted to support her journey toward financial independence. Jordan, who is autistic, was still in high school and had just started a part-time job at a local grocery store.
To help her manage this new stage of life, her family opened an ABLE account. Through this account, she was able to use a debit card to pay for transportation and job training, supporting her ability to grow while preserving her eligibility for government benefits.
Not only would her work income flow into the account, but her grandmother would also be able to contribute $19,000 a year to help support her long-term needs.
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For Jordan and her family, the ABLE account was more than a savings tool — it became a gateway to autonomy.
Jordan's personal story is a prime example of how ABLE accounts can empower those with a disability to accumulate assets.
With an ABLE account, you can also participate in tax-free withdrawals and maintain Medicaid eligibility regardless of the account size. Eligible individuals of all ages can benefit from incorporating these accounts into their financial plans.
Since their launch in 2016, ABLE accounts have helped more than 187,000 people (as of 2024), according to the Social Security Administration. But many people are still unsure how these accounts work, when to use them or if they are even eligible.
What is an ABLE account?
Think of an ABLE account as a tax-advantaged savings account for individuals with a disability. This includes people who are autistic, have Down syndrome or have sickle cell disease, for example.
The money in the account can be used for qualified disability expenses (QDEs), such as housing, education, transportation, health care and more. And the best part? Withdrawals are tax-free when used for these qualified expenses.
Unlike more complex tools, such as special needs trusts, ABLE accounts are designed to be accessible. The account can be managed by the individual or a caregiver, and many programs offer debit cards or checking access, making it easy to use for everyday purchases.
Still, there are a few myths floating around. One common misconception is that you have to be receiving Supplemental Security Income (SSI) or Medicaid to open an ABLE account. Eligibility is based on disability status, not whether someone is currently receiving benefits.
Another myth? Only the individual with the disability can contribute. In fact, family members, friends and other loved ones can contribute, which makes it a great option for gifting.
Who can open an ABLE account?
To qualify, the individual must have had a qualifying disability diagnosed before age 26. According to the ABLE National Resource Center, the age threshold will increase to 46, starting in 2026, vastly expanding access for many more families.
What are the benefits?
One of the biggest advantages of an ABLE account is the opportunity for tax-deferred growth. When funds are invested, they grow without being taxed, and as long as withdrawals are used for QDEs, they are not taxed either.
This can make a meaningful difference over time, allowing savings to stretch further.
ABLE accounts also offer important protection of public benefits. Up to $100,000 in an ABLE account is excluded from SSI resource limits. Even if the account goes over that amount, Medicaid eligibility remains intact.
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This allows individuals to plan for significant expenses, such as a wheelchair-accessible van, adaptive technology or home modifications, without putting vital benefits at risk.
Beyond financial protection, ABLE accounts encourage independence. With direct access to funds, individuals can learn how to manage money, make financial choices and build skills that support long-term independence.
Finally, contributions to ABLE accounts are flexible. In 2025, families can contribute up to $19,000 annually, and contributions can come from multiple sources.
Additional contributions from working income can be made directly into the account beyond the annual limit, making it easier to build a cushion for both everyday needs and long-term goals.
What to watch out for
While ABLE accounts are incredibly useful, there are a few considerations to keep in mind. In 2025, the maximum you can contribute is $19,000 a year, according to the ABLE NRC, plus extra if the account holder is working.
For more significant goals, such as buying an accessible home, this limit might not be enough. In those cases, it can make sense to use an ABLE account in combination with other savings tools, such as a special needs trust.
Another key factor is how savings interact with government benefits. One of the biggest draws of an ABLE account is that it allows savings without jeopardizing eligibility for benefits, including SSI.
However, if the account balance exceeds $100,000, SSI benefits may be temporarily suspended. This means regular monitoring of the account is important to avoid surprises.
It's also worth paying attention to Medicaid payback. In many states, when the account holder passes away, remaining funds may be claimed to reimburse Medicaid expenses.
However, several states have eliminated this provision or are working on doing so. It's worth checking your state's rules so you can plan accordingly, especially if your goal is to pass remaining assets to future generations.
Finally, ABLE account withdrawals must be used for QDEs. If you withdraw more than the allowable QDEs in a given year, the extra amount is subject to income tax on the earnings portion and a 10% penalty.
Careful tracking of expenses can help avoid these charges and in preparation of audits related to SSI, Medicaid and other government benefits.
Many families feel overwhelmed by the rules and freeze before taking action, but most state plans offer user-friendly platforms and support to help you get started.
Making ABLE part of the bigger picture
Every family's situation is different, and there's no one-size-fits-all approach when it comes to planning for a loved one with special needs.
In fact, it often makes sense to have multiple savings tools working together. That's where ABLE accounts can really shine.
Depending on your goals, ABLE accounts can play a meaningful role in a broader financial or estate plan. They offer flexibility, accessibility and tax advantages that pair well with other strategies, such as special needs trusts and life insurance.
If you're not sure how it all fits together, that's okay. A Chartered Special Needs Consultant can help you sort through your options and figure out how an ABLE account might support your overall strategy.
With the proper guidance, ABLE accounts can be more than just a savings tool. They can be a stepping stone toward security, opportunity and independence.
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