ABLE Accounts: Eligibility, Contributions, and How to Get Started
An ABLE account—short for Achieving a Better Life Experience account—is a tax-advantaged savings account specifically designed for people with disabilities. Think of it as a 529 college savings plan, but instead of saving for education, you're saving for disability-related expenses while preserving your eligibility for means-tested benefits like SSI and Medicaid.
Before ABLE accounts existed (the ABLE Act passed in 2014, with accounts launching in 2016), people receiving SSI faced an impossible choice: save more than $2,000 and lose benefits, or remain in poverty to keep essential support. ABLE accounts changed that equation by creating a protected space where people with disabilities can save significant amounts without jeopardizing their benefits.
An ABLE account lets eligible individuals save up to $100,000 without affecting SSI eligibility—50 times the standard resource limit.
Who Is Eligible for an ABLE Account?
To open an ABLE account, you must meet the following criteria:
1. Disability Onset Before Age 46
The ABLE Savings Act, passed in 2022, expanded eligibility from the original onset age of 26 to age 46. This means anyone whose disability began before their 46th birthday may qualify. "Onset" refers to when your disability began, not when you were diagnosed or started receiving benefits.
2. Meet the Disability Definition
You meet the disability requirement if you fall into one of these categories:
- Already receiving benefits: You're currently entitled to SSI or SSDI based on disability—this is the simplest path.
- Self-certification: Even without receiving SSI or SSDI, you can self-certify eligibility if you have a medically determinable impairment that results in "marked and severe functional limitations" expected to last at least 12 months or result in death, OR you're blind.
Self-certification requires you to keep documentation on file (a signed physician's diagnosis letter) but doesn't require submitting proof to open the account.
3. One Account Per Person
You can only have one ABLE account nationwide, regardless of which state's program you use.
Key Benefits of ABLE Accounts
1. Protected from SSI Resource Limits
The first $100,000 in your ABLE account is completely excluded when calculating resources for SSI eligibility. If your balance exceeds $100,000, your SSI payments pause (but don't terminate) until the balance drops below $100,000 again. Your Medicaid coverage continues regardless of your ABLE account balance.
2. Medicaid Protection
ABLE account funds are excluded from resource calculations for Medicaid eligibility entirely, with no cap. Even balances above $100,000 don't affect Medicaid.
3. Tax-Free Growth and Withdrawals
Money in your ABLE account grows tax-free. Withdrawals for qualified disability expenses are also tax-free at both federal and state levels (in most states).
4. State Tax Benefits
Many states offer state income tax deductions or credits for ABLE account contributions.
Contribution Limits and Rules
Annual Contribution Limit
The annual contribution limit equals the federal gift tax exclusion amount: $20,000 in 2026. This limit applies to total contributions from all sources (yourself, family, friends, employers).
ABLE to Work Provision
If you work and don't participate in an employer retirement plan, you can contribute additional funds beyond the $20,000 limit—up to the federal poverty level for a one-person household (approximately $15,650 in 2026) or your annual gross wages, whichever is less.
Lifetime Limit
Total lifetime contributions are capped at your state's limit for 529 education savings plans, which varies by state (typically $300,000-$500,000 or more).
Who Can Contribute?
Anyone can contribute to your ABLE account: you, parents, grandparents, other family members, friends, employers, or trusts. All contributions count toward your annual limit.
What Are Qualified Disability Expenses?
ABLE account funds must be used for "qualified disability expenses" (QDEs)—expenses related to your disability that help maintain or improve your health, independence, or quality of life. The IRS defines these broadly:
- Housing (rent, mortgage, utilities, property taxes, home modifications)
- Transportation (car payments, insurance, gas, repairs, public transit, rideshare)
- Education and training (tuition, books, tutoring)
- Employment support (job coaching, workplace accommodations)
- Health and wellness (medical expenses, gym memberships, nutrition programs)
- Assistive technology (devices, equipment, software)
- Personal support services (aide services not covered by other programs)
- Financial management and legal fees
- Funeral and burial expenses
- Basic living expenses (food, clothing)
Keep records: Save receipts and documentation for all withdrawals. While you don't need to submit proof with each withdrawal, you should be able to demonstrate that expenses were qualified if asked.
How ABLE Accounts Interact with Benefits
SSI (Supplemental Security Income)
- First $100,000 excluded from resources
- If balance exceeds $100,000, SSI suspends (not terminates)
- Once balance drops below $100,000, SSI payments resume
- Withdrawals for housing expenses (rent, mortgage, utilities) count as unearned income in the month received
Important: Housing-related withdrawals from ABLE accounts are treated as income for SSI purposes and can reduce your SSI payment for that month. Non-housing qualified expenses don't count as income.
Medicaid
Entire ABLE account balance excluded, regardless of amount. Coverage continues even if SSI suspends due to ABLE balance.
SSDI, SNAP, and HUD Housing
- SSDI: ABLE accounts don't affect SSDI at all (no resource limit)
- SNAP: ABLE balances are excluded from resource calculations; withdrawals don't count as income
- HUD Housing: ABLE balances excluded from asset calculations; distributions for housing costs don't count as income
How to Open an ABLE Account
Step 1: Choose a State Program
You can open an ABLE account in any state that accepts out-of-state residents—you're not limited to your home state. Compare programs based on investment options, fees, minimum contributions, state tax benefits, and features.
Popular programs include those administered by Virginia (ABLEnow), Ohio (STABLE), California (CalABLE), and Nebraska (Enable Savings Plan).
Step 2: Gather Required Information
- Your Social Security number
- Date of birth and contact information
- Bank account information (for contributions and withdrawals)
- Disability documentation (if self-certifying rather than receiving SSI/SSDI)
Step 3: Open the Account Online
Most ABLE programs allow online enrollment. The process typically takes 15-30 minutes: visit the program's website, complete the application, certify your eligibility, choose your investment options, and set up contributions.
Step 4: Fund and Manage Your Account
Set up contributions via bank transfer, check, or payroll deduction. Track your account balance, investment performance, and withdrawals. Keep records of all expenses paid with ABLE funds.
ABLE Account Strategies
- Start early and contribute consistently. Even small regular contributions grow over time with tax-free growth.
- Consider your SSI housing withdrawal carefully. Since housing withdrawals count as income for SSI, you might time these strategically or use non-ABLE funds for housing when possible.
- Use ABLE for emergencies. Building an emergency fund is especially important when living on a fixed income.
- Coordinate with other planning tools. ABLE accounts work alongside special needs trusts, PASS plans, and other disability financial planning strategies.
FAQs
Can I open an ABLE account in another state?
Yes, you can open an ABLE account in any state that accepts out-of-state residents—you're not limited to your home state.
What counts as a qualified disability expense?
Qualified expenses include housing, transportation, education, healthcare, assistive technology, personal support services, and basic living expenses that help maintain or improve your health, independence, or quality of life.
How do ABLE accounts affect SSI?
The first $100,000 in your ABLE account is excluded from SSI resources. If your balance exceeds $100,000, SSI suspends (not terminates). Medicaid coverage continues regardless of balance.
Can family members contribute to my ABLE account?
Yes—anyone can contribute including family, friends, and employers, but all contributions count toward the $20,000 annual limit.
Purple + ABLE: A Complete Financial Picture
An ABLE account is a powerful savings tool, but it works best as part of your broader financial strategy. Purple's checking account helps you manage your day-to-day spending and track resources for SSI compliance, while your ABLE account provides protected long-term savings.
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