If you're living with a disability and receiving SSI or SSDI, you've probably heard that saving money can actually put your benefits at risk. ABLE accounts change that equation entirely—they're one of the most powerful financial tools available to people with disabilities, yet many eligible individuals don't know they exist or how they work.
In this article, we'll cover:
- What ABLE accounts are and how they came to exist
- Who qualifies to open an ABLE account
- How ABLE accounts protect your SSI and Medicaid benefits
- Contribution limits and what you can use the funds for
- How ABLE accounts compare to special needs trusts
- Steps to open your own ABLE account
What Is an ABLE Account?
An ABLE account—which stands for Achieving a Better Life Experience—is a tax-advantaged savings account specifically designed for people with disabilities. Created by the ABLE Act of 2014, these accounts allow eligible individuals to save money without jeopardizing their means-tested benefits like SSI and Medicaid.
Think of an ABLE account as a 529 college savings plan, but instead of education expenses, it covers disability-related expenses. The money in your ABLE account grows tax-free, and withdrawals for qualified expenses are also tax-free. Most importantly, the funds in your ABLE account don't count toward the $2,000 resource limit that SSI recipients must stay under to keep their benefits.
Before ABLE accounts existed, people with disabilities faced an impossible choice: save money and lose essential benefits, or stay impoverished to maintain healthcare and income support. ABLE accounts offer a middle path that respects both financial independence and the reality that disability-related costs are significant.
Who Is Eligible for an ABLE Account?
To open an ABLE account, you must meet specific criteria related to when your disability began. The key requirement is that your disability must have started before age 26. This was recently expanded from the original age 26 cutoff—the ABLE Age Adjustment Act raised the age of onset requirement to 46, though this change takes effect in 2026.
You qualify if you meet one of these conditions: you're already receiving SSI or SSDI benefits based on a disability that began before age 26, or you can self-certify that you have a qualifying disability that began before that age. Self-certification requires that you meet Social Security's definition of disability and have documentation from a licensed physician.
There's no upper age limit for having an ABLE account—if you're 60 years old but your disability began when you were 20, you're eligible. The onset date is what matters, not your current age.
Each person can have only one ABLE account, though you can choose a program from any state. Many people shop around for the best investment options, lowest fees, or features that match their needs, since you're not limited to your home state's program.
How ABLE Accounts Protect Your Benefits
The protection ABLE accounts offer for SSI and Medicaid recipients is substantial. Here's how it works:
For SSI purposes, the first $100,000 in your ABLE account is completely excluded from the resource limit. This means you could have $100,000 in your ABLE account plus another $2,000 in regular bank accounts and still qualify for SSI. If your ABLE account balance exceeds $100,000, your SSI payments are suspended—but not terminated—until the balance drops back down. Importantly, your Medicaid coverage continues regardless of your ABLE account balance.
For Medicaid, ABLE account funds are entirely excluded from resource calculations with no cap. This is crucial because Medicaid provides healthcare coverage that many people with disabilities simply cannot afford to lose.
SSDI recipients don't have resource limits, so ABLE accounts don't affect SSDI eligibility. However, SSDI recipients who also receive SSI (called concurrent beneficiaries) get the same protections described above for their SSI portion.
Contribution Limits and Qualified Expenses
In 2026, the annual contribution limit for ABLE accounts is $20,000—the same as the annual gift tax exclusion. This limit applies to total contributions from all sources, including family members, friends, and the account owner. If you're employed and don't participate in an employer retirement plan, you may be able to contribute additional funds up to the lesser of your gross wages or the federal poverty level for a one-person household.
The lifetime limit varies by state but is typically between $300,000 and $500,000, matching that state's 529 education savings plan limit.
Qualified disability expenses are broad and cover most costs related to living with a disability. These include housing and rent, transportation and vehicle modifications, education and job training, healthcare and wellness costs, assistive technology, personal support services, financial management services, and basic living expenses. The key is that the expense must relate to maintaining or improving your health, independence, or quality of life.
Non-qualified withdrawals are subject to income tax plus a 10% penalty on the earnings portion, so it's important to use funds appropriately and keep records of your expenses.
ABLE Accounts vs. Special Needs Trusts
Both ABLE accounts and special needs trusts help people with disabilities save without losing benefits, but they serve different purposes and have different rules.
ABLE accounts are simpler to set up, have lower costs, and give you direct control over your money. You can open one online, manage it yourself, and make withdrawals with a debit card. The downside is the $100,000 limit for SSI protection and the annual contribution cap.
Special needs trusts can hold unlimited assets and don't have annual contribution limits, making them better for larger inheritances or lawsuit settlements. However, they require an attorney to establish, need a trustee to manage them, and typically have higher ongoing costs. The beneficiary also has less direct control over spending.
Many people use both: an ABLE account for day-to-day disability expenses they manage themselves, and a special needs trust for larger assets that need professional management.
How to Open an ABLE Account
Opening an ABLE account is straightforward. Start by researching programs—while each state sponsors an ABLE program, you can typically enroll in any state's program regardless of where you live. Compare fees, investment options, and features like debit cards or checking account functionality.
Once you've chosen a program, you'll complete an online application that asks for basic personal information, documentation of your disability (or self-certification), and your Social Security number. Most applications take about 15-20 minutes.
After your account is open, you can fund it through direct deposit, bank transfers, or contributions from family and friends. Many programs offer automatic contribution features to help you save consistently.
Taking control of your financial future while protecting your benefits is possible. Purple partners with state ABLE programs to help you manage your benefits and savings in one place, making it easier to build financial security without the stress of compliance worries.