If you receive SSI or other means-tested benefits, you've probably felt the frustration of the $2,000 resource limit. It's hard to build any kind of financial cushion when saving too much means losing the benefits you depend on. That's exactly the problem ABLE accounts were created to solve. They give people with disabilities a way to save money without putting their benefits at risk—and they're one of the most underused financial tools available today.
In this article, we'll cover:
- What ABLE accounts are and how they were created
- Who is eligible to open an ABLE account
- How much you can contribute and what counts toward benefit limits
- What you can spend ABLE funds on
- How ABLE accounts interact with SSI, Medicaid, and SNAP
- How to open an ABLE account
What Is an ABLE Account?
ABLE stands for Achieving a Better Life Experience. Created by the ABLE Act of 2014, these are tax-advantaged savings accounts designed specifically for people with disabilities. Think of them as similar to a 529 college savings plan, but instead of being restricted to education expenses, ABLE funds can be used for a much broader range of disability-related needs.
The key benefit is simple: money in an ABLE account generally doesn't count as a resource for purposes of SSI, Medicaid, SNAP, and most other means-tested federal benefit programs. This means you can save well beyond the $2,000 SSI resource limit without risking your benefits.
ABLE accounts also offer tax-free growth. Any investment earnings in the account aren't subject to federal income tax as long as the money is used for qualified disability expenses. In many states, contributions may also qualify for a state tax deduction.
Who Can Open an ABLE Account?
To be eligible for an ABLE account, you must have a significant disability with an age of onset before age 26. This doesn't mean you have to be under 26 now—it means your disability must have begun before your 26th birthday. A 50-year-old who became disabled at age 20, for example, is eligible.
You can establish eligibility in one of two ways. If you're already receiving SSI or SSDI and your disability began before age 26, you're automatically eligible. If you're not receiving benefits but have a qualifying disability, you can self-certify your eligibility with a diagnosis from a licensed physician or by meeting Social Security's criteria for disability.
Thanks to recent legislative changes, you no longer have to open an ABLE account in your state of residence. You can shop around and choose any state's ABLE program, which lets you compare fees, investment options, and features to find the best fit for your needs.
Contribution Limits and Rules
In 2026, you can contribute up to $20,000 per year to an ABLE account. This is the total from all sources—your own contributions, gifts from family and friends, and transfers from other accounts all count toward the annual cap.
If you're working, you may be able to contribute even more through the ABLE to Work provision. This allows employed ABLE account holders who don't participate in an employer retirement plan to contribute an additional amount equal to the federal poverty level for a one-person household, which is approximately $15,650 in 2026. That means a working ABLE account holder could potentially contribute over $35,000 in a single year.
There's also an overall account balance limit, which varies by state but is typically $100,000 or more. However, there's an important nuance for SSI recipients: if your ABLE account balance exceeds $100,000, your SSI cash payments will be suspended (though not terminated) until the balance drops back below that threshold. Your Medicaid coverage continues regardless of the ABLE account balance, which is a significant protection.
What Can You Spend ABLE Funds On?
ABLE funds must be used for qualified disability expenses (QDEs), but this category is intentionally broad. It includes education and tutoring, housing costs (rent, mortgage, utilities), transportation (including vehicle purchases and maintenance), assistive technology and personal support services, health care and wellness expenses, financial management and legal fees, job training and employment support, and basic living expenses like food and clothing.
The flexibility is one of the strongest features of ABLE accounts. Unlike many restricted savings programs, ABLE funds can cover everyday necessities as well as bigger goals like a down payment on accessible housing or a new wheelchair-accessible vehicle.
There's one important note for SSI recipients: if you use ABLE funds for housing expenses (rent, mortgage, property taxes, utilities), those withdrawals may be treated differently than other spending for SSI purposes. However, using ABLE funds for food and housing is still generally advantageous compared to holding those savings in a regular bank account, where they'd count against the $2,000 resource limit.
How ABLE Accounts Interact with Your Benefits
The benefit interactions are where ABLE accounts really shine. For SSI, the first $100,000 in your ABLE account is completely excluded from the resource limit. This is a game-changer compared to the standard $2,000 limit. Contributions to your ABLE account from others aren't counted as income to you for SSI purposes either, which means a family member can deposit money into your ABLE account without reducing your monthly SSI payment.
For Medicaid, ABLE accounts have even stronger protections. Your Medicaid eligibility continues no matter how high your ABLE account balance grows, even above $100,000. Given that Medicaid coverage is often the most valuable benefit a person receives, this protection alone makes ABLE accounts worth considering.
For SNAP, ABLE account balances are excluded from the resource test, similar to SSI. This provides additional financial breathing room for people who rely on food assistance.
How to Open an ABLE Account
Opening an ABLE account is relatively straightforward. You can apply through any state's ABLE program—most have online enrollment available. You'll need to certify your eligibility, choose your investment options (most programs offer a range from conservative to growth-oriented), and designate a beneficiary (which will be yourself).
When comparing programs, look at the fees (some charge monthly or annual maintenance fees), the quality and variety of investment options, any state tax benefits available to you, and the program's debit card or withdrawal options for accessing your funds.
Some ABLE programs offer a debit card linked to your account, making it easy to use ABLE funds for everyday qualified expenses without needing to transfer money to a bank account first.
Saving for your future shouldn't mean risking your benefits. Purple can help you manage your disability benefits alongside tools like ABLE accounts, making it easier to build financial stability while staying compliant.