ABLE Accounts: A Savings Tool to Empower People With Disabilities

A smiling girl with purple arm braces sits in a wheelchair.

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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.

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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.

Ella Vincent is a personal finance writer who has written about credit, retirement, and employment issues. She has previously written for Motley Fool and Yahoo Finance. She enjoys going to concerts in her native Chicago and watching basketball.