Understanding ABLE Accounts: Empowering Financial Independence for Individuals with Disabilities

Paul Safarik, a 32-year-old from Lincoln, Nebraska, has successfully navigated the food industry since the age of 21. His work includes delivery roles for quick-service restaurants such as Raising Cane’s and stocking groceries at Trader Joe’s. Recently, with his earnings, Safarik, who has Down syndrome, purchased a treadmill to maintain his fitness during inclement weather and contributed towards his dental braces. His ability to save and invest in personal health exemplifies the potential financial freedom enabled by ABLE accounts.

What Are ABLE Accounts?

The Achieving a Better Life Experience (ABLE) account, introduced through legislation in 2014, is a unique savings tool designed specifically for individuals with disabilities. These accounts allow beneficiaries to save more than the typical $2,000 asset limit without risking valuable government benefits, such as Supplemental Security Income (SSI) and Medicaid. Currently, eligibility extends to individuals who have been identified with a disability before the age of 26, with plans to raise this limit to 46 years old in 2026, thus broadening access to an estimated additional 6 million individuals, including veterans.

Impact on Financial Planning

The ABLE account is transforming the financial landscape for individuals with disabilities. “The fact that it used to be that individuals could only save up to $2,000 or they could lose benefits — that was really restricting a lot of families,” remarked Indiana State Treasurer Daniel Elliott, who oversees these accounts in his state. With average account balances now hovering between $11,000 and $12,000, these accounts represent a significant improvement in financial security and independence.

Account Contributions and Benefits

There is flexibility in contributing to an ABLE account; anyone can contribute, including the account owner, family members, friends, and employers, with a limit of $19,000 annually as of 2025. Additionally, individuals who work can contribute an amount equal to their gross annual income, potentially adding up to an extra $18,810, depending on their state.

Furthermore, the tax advantages associated with ABLE accounts make them particularly appealing. Investment earnings within these accounts accumulate tax-free, provided withdrawals are used for “qualified disability expenses” including healthcare, education, and job training.

Challenges in Awareness and Accessibility

Despite the advantages, many eligible individuals remain unaware of ABLE accounts. Elliott emphasized this awareness gap saying, “Many people are used to the idea that, ‘If I have a disability or my child has one, it could endanger their benefits to save money.’” The National Association of State Treasurers (NAST) is actively working to disseminate accurate information, but as of the end of 2024, only 186,641 ABLE accounts existed out of an estimated 8 million eligible individuals.

Eligibility and Accessibility

To determine eligibility for an ABLE account, individuals must meet specific criteria:

• The disability must have started before the age of 26.
• The disability should be classified as “long-term” or “terminal,” leading to significant functional limitations.

Furthermore, the individual must also meet one of the following:

• Be eligible for Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI); or
• Have a doctor’s diagnosis of the disability, whether mental or physical.

Preparing for Future Eligibility

For those who may qualify for an ABLE account following the new age limit in 2026, now is the time to start learning about the setup process to facilitate contributions as soon as possible. Friends, family, and related organizations can also begin setting aside funds designated for future contributions, empowering individuals with disabilities to plan for a more secure financial future.

Conclusion

ABLE accounts have the potential to shift financial narratives for individuals with disabilities, fostering a newfound sense of independence and savings capability. As awareness grows and access expands, the landscape of financial planning for individuals with disabilities will continue to evolve.

For more detailed guidance on ABLE accounts, consult resources such as ABLE Today and the ABLE National Resource Center.