If you’re supporting a loved one with a disability, you know how important it is to plan for their financial well-being. From making day-to-day purchases to covering healthcare costs, the National Disability Institute estimates that households affected by disability require 28% more income to maintain the same standard of living as those who aren’t affected.

For many individuals and families facing these costs, an ABLE account can be a powerful financial tool. These savings accounts, specifically designed for individuals with disabilities, allow money to be set aside for essential expenses, while helping to preserve access to critical benefits like Supplemental Security Income (SSI) and Medicaid.

What is an ABLE Account?

The Achieving a Better Life Experience (ABLE) Act, created a new way for people with disabilities to save, invest, and spend money. The ABLE Act allows states to establish tax-advantaged programs for individuals with disabilities, similar to 529 college savings accounts. Since this program began in 2014, families across the country have contributed over $1.25 billion to ABLE accounts, using these funds to help bridge the financial gap and improve their loved ones' quality of life.

ABLE accounts function similarly to typical bank accounts, though they are considered investment accounts rather than traditional checking or savings accounts. When setting up an ABLE account, you’ll usually have a selection of investment options with varying levels of risk, often including an FDIC-insured choice. A key benefit of ABLE accounts is that they enable individuals to grow their savings through investments while still allowing for withdrawals and spending flexibility as funds are needed.

Who Qualifies for an ABLE Account?

To open an ABLE account for your loved one, certain eligibility criteria must be met. In general, the individual’s disability must have been present before the age of 26 (though this age limit will increase to 46 in 2026). Even if your loved one isn’t receiving SSI or Medicaid, they may still qualify based on their disability status. You can learn more about the Social Security Administration’s (SSA’s) eligibility requirements and disability certification process here. 

How Contributions Work

One of the unique benefits of an ABLE account is that anyone can contribute, including family members, friends, your loved one’s employer, or the individual themselves. Total contributions are capped at $19,000 annually for 2025 (per account, not per contributor). Although, if your loved one works and doesn’t have access to a retirement plan, they may be eligible to contribute an additional amount. More details from the SSA about contributions can be found here. 

Maintaining Public Benefits with an ABLE Account

For many people with disabilities, one of the key benefits of an ABLE account is that it helps to preserve access to public benefits like SSI and Medicaid which have low income and asset limits to qualify. Typically, SSI is available to individuals earning less than $1,971 from work each month, but ABLE accounts can allow earned income (within contribution limits) to be saved without impacting benefits eligibility.

SSI also limits “countable resources” to $2,000, generally including bank account funds. However, ABLE accounts are an exception, allowing SSI recipients to save up to $100,000 without affecting their benefits. For Medicaid, there’s even more flexibility – individuals can continue receiving coverage regardless of their ABLE account balance, even if it exceeds $100,000.

Using ABLE Accounts for Everyday Expenses

An ABLE account is a valuable way for families to cover costs that support their loved one’s health, independence, and quality of life. If you’re familiar with Special Needs Trusts (SNTs), you may know that when distributions are used for certain expenses, the SSA may reduce the beneficiary’s SSI for in-kind support and maintenance benefits. One advantage of ABLE accounts is that they don’t carry this same restriction and funds can be used for a number of Qualified Disability Expenses (QDEs) including: 

• Education and job training
• Personal care or assistance services
• Medical and health support
• Housing and shelter costs
• Transportation needs
• Financial management and other day-to-day support services

You can learn more about how to use an ABLE account to make everyday purchases in this article.

Long-Term Savings and Planning

While ABLE accounts are often used for everyday expenses, they can also be part of a long-term financial plan. Families can build savings over time through regular contributions – and although these contributions are not tax-deductible themselves, investment earnings are not taxed when funds are used for QDEs. This flexibility makes it easier to set aside funds for larger needs or future expenses, such as healthcare emergencies, housing adjustments, or other significant costs, giving you and your loved one greater peace of mind. 

For families supporting a loved one with a disability, an ABLE account can be an essential financial tool. With tax advantages, flexible contributions, and the ability to protect public benefits access, these accounts can provide a financial safety net that supports your loved one’s quality of life.