What Are ABLE Accounts?
ABLE (Achieving a Better Life Experience) accounts are designed to enable individuals with disabilities to save and pay for disability-related expenses without being cut off from public benefits like Social Security Disability Insurance and Medicaid.
The ABLE Act currently limits eligibility to individuals with disabilities with an onset of disability before turning 26 years of age. An estimated 14 million people will qualify under the new age threshold of 46.
How much can I contribute?
The total annual contribution maximum for 2023 is $17,000. If a disabled person with an ABLE account works, that person can contribute extra from his or her own earnings, up to $13,590 in most states, for an annual total of $30,590.
There are caps on total balances. Generally, accounts can grow to $100,000 without affecting Supplemental Security Income. But balances can be much higher without affecting eligibility for other benefits, like Medicaid or federal housing assistance. State ABLE limits range from $235,000 - $550,000. There is no federal tax deduction for contributing to an ABLE account, but earnings and withdrawals for eligible expenses are tax-free. Some states may offer state tax breaks for contributions.
What can the accounts be used for?
The accounts let people with disabilities save and invest for qualified disability expenses, including housing, education, employment training, assistive technology, personal support services, health care expenses, financial management, transportation, legal costs and other expenses which help improve health, independence, and quality of life.
Image description: Sara Wolff, disability advocate urges Congress in 2014 to increase the ABLE account savings benefits.