For people with disabilities who receive SSI or other needs-based benefits, saving money has always been a challenge. Strict resource limits mean that building even a modest emergency fund can put your benefits at risk. ABLE accounts changed that equation, offering a way to save and invest money without jeopardizing the benefits you depend on. If you've never heard of ABLE accounts—or heard of them but weren't sure if you qualify—this guide will explain everything you need to know.
In this article, we'll cover:
- What ABLE accounts are and why they were created
- Eligibility requirements and the age-of-onset rule
- Contribution limits and how they work
- What you can use ABLE account funds for
- How ABLE accounts interact with SSI and other benefits
- How to open an ABLE account
The Basics of ABLE Accounts
ABLE stands for Achieving a Better Life Experience. These accounts were created by federal legislation in 2014 specifically to help people with disabilities save money without losing their eligibility for means-tested benefits like SSI and Medicaid.
Key features:
- Tax-advantaged savings account (similar to a 529 plan)
- Designed specifically for disability-related expenses
- Money grows tax-free
- Withdrawals are tax-free for qualified disability expenses
- First $100,000 is excluded from SSI's resource limit
This means you can save money in an ABLE account without counting it against the $2,000 ceiling that makes financial planning so difficult for SSI recipients.
Who Qualifies for an ABLE Account?
To open an ABLE account, you must have a significant disability that began before a certain age.
Age-of-onset requirement:
- Under the ABLE Age Adjustment Act (effective 2026), the threshold increased from 26 to 46 years old
- This expansion dramatically increased the number of people who can benefit
You qualify if:
- You're already receiving SSI or SSDI based on a disability that began before age 46, OR
- You have a condition that meets Social Security's disability criteria with onset before age 46 and can provide a signed diagnosis from a licensed physician
Disability requirements:
- Must be significant (marked and severe functional limitations)
- Must be expected to last at least 12 months or result in death
- Most people who receive disability benefits will meet these criteria
- Also available to people with qualifying disabilities who don't receive government benefits
Contribution Limits
Annual contribution limits (2025):
- Up to $18,000 per year (tied to federal gift tax exclusion)
- If you're working and don't have an employer retirement plan, you may be able to contribute additional amounts
Total account balance limits:
- Vary by state (ABLE programs are administered at state level)
- Most states set limits between $300,000 and $500,000 or more
- Once you reach your state's limit, no additional contributions until balance drops
- Existing funds can continue to grow
Who can contribute:
- The account owner
- Family members
- Friends
- Employers
- Anyone who wants to help
Qualified Disability Expenses
ABLE account funds can be used for a wide range of qualified disability expenses (QDEs). The definition is intentionally broad.
Qualified expenses include:
- Housing (rent, mortgage, utilities)
- Transportation (car payments, insurance, gas, public transit)
- Education costs
- Job training
- Assistive technology
- Personal support services
- Healthcare expenses not covered by insurance
- Basic living expenses
- Legal fees
- Financial management services
- Some recreational activities
The key is that the expense must be related to maintaining or improving health, independence, or quality of life.
How ABLE Accounts Affect SSI
Resource limit exclusion:
- First $100,000 in your ABLE account is excluded from SSI's resource limit
- You could have $100,000 in ABLE plus $2,000 in regular accounts and still meet SSI's $2,000 limit
If your ABLE balance exceeds $100,000:
- SSI payments would be suspended (not terminated)
- Benefits resume when balance drops below threshold
- Medicaid coverage continues even while SSI is suspended
Distributions and income:
- Distributions for housing expenses (rent, mortgage, utilities) count as income for SSI
- May reduce your SSI payment in the month you make the withdrawal
- Distributions for non-housing qualified expenses don't count as income at all
Understanding this distinction can help you time your ABLE withdrawals strategically.
Opening an ABLE Account
State programs:
- ABLE accounts are offered through state programs
- You're not limited to your own state's program
- Can open an account in any state that accepts out-of-state residents
- Shop around for best investment options and lowest fees
To open an account, you'll need:
- Basic personal information
- Documentation of your disability (if not already receiving SSI or SSDI)
- Choose how you want contributions invested
Popular programs:
- Ohio, Nebraska, and Virginia are known for low fees and good investment options
- Many programs allow online account opening in minutes
- Compare several programs before choosing
ABLE Accounts and Long-Term Planning
Beyond meeting the resource limit, ABLE accounts open up possibilities:
- Save for a future home modification
- Build a fund for a specialized vehicle
- Set aside money for education or training
- Create an emergency cushion
For families:
- Parents and grandparents can contribute during their lifetime
- Can leave funds to the account in their will
- Inheritance won't immediately disqualify the recipient from benefits
How Purple Helps
Ready to start saving without risking your benefits? Purple can help you understand how ABLE accounts fit into your overall financial picture and connect you with the tools you need to manage your money with confidence.
- Track your regular account balances
- Understand your resource situation
- Get benefits up to 4 days early
- Manage your day-to-day finances while your ABLE account grows