ABLE Accounts: Expanding Savings for Millions with Disabilities

Understanding ABLE Accounts

• 💡 ABLE accounts are a special savings and investment strategy designed for individuals with disabilities.
• 🎯 The name ABLE stands for Achieving a Better Life Experience.
• 🔑 These accounts allow individuals to save and invest up to $100,000 without impacting essential government benefits like Supplemental Security Income (SSI).

Tax Advantages and Usage

• 💰 Funds in ABLE accounts grow tax-free.
• 💸 Withdrawals are free from federal and state income tax, provided they are used for disability-related expenses such as housing, transportation, and healthcare.

Eligibility and Expansion

• 📌 To be eligible, an individual must receive Social Security disability benefits or SSI, or have a physician's statement confirming a disability that began before age 26.
• 📈 Starting January 1, 2026, the eligibility age for the onset of disability will increase to 46, potentially making an estimated 15 million people eligible.
• 🌍 While created by federal law, ABLE accounts are set up by states, with 46 states and Washington D.C. offering programs, some open to out-of-state residents.

Contribution Limits and New Provisions

• 📊 Annual contributions are tied to the annual gift tax exclusion, which is $19,000 in the current year and expected to rise with inflation.
• 🔄 A significant change allows for the rollover of 529 education savings plans into ABLE accounts, benefiting families where a child may not attend college or if a disability arises later in life.
• ✨ Eligible lower and moderate-income families may also qualify for a savers credit when contributing to an ABLE account.