ABLE accounts expand eligibility for individuals with disabilities

An ABLE account is a helpful savings tool for people with disabilities. It allows individuals to save money without affecting their disability benefits. This can greatly enhance their quality of life. Currently, a person can receive a maximum of $967 per month from Supplemental Security Income if they have a disability. However, they can lose these benefits if their assets exceed $2,000. ABLE accounts, introduced in 2014, provide a way to save for necessary expenses while keeping benefits intact. To be eligible, a person must receive SSI or Social Security Disability Insurance, or have a severe disability diagnosed before age 26. In 2026, the age limit will expand to include those diagnosed before age 46. This change could allow an additional 6 million people, including many veterans, to use ABLE accounts. Money in ABLE accounts can be spent on various needs, such as housing, education, or medical equipment. If a college student with a disability has unused funds from a 529 college plan, those can be transferred to an ABLE account without extra taxes. The contributions to ABLE accounts are made after taxes, but the account grows tax-free. Distributions for qualified expenses are also not taxed. Anyone can contribute up to $19,000 per year to an ABLE account in 2025. Most U.S. states offer ABLE accounts, though four do not. Those in non-participating states can apply through other states. Some states also offer tax deductions for contributions to ABLE accounts. For example, Michigan offers a deduction of up to $5,000. To open an ABLE account, a person needs basic identification and proof of disability. If the beneficiary cannot manage the account, someone else can be authorized to help. It's important to note that if the account exceeds $100,000, SSI benefits may be reduced. If the account holder passes away, leftover funds may go to the state for Medicaid reimbursement.