The ABLE Account
The ABLE Account
In 2014, Congress passed the Stephen Beck, Jr. Achieving a Better Life Experience (ABLE) Act. It was originated by a group of parents who recognized that it was unfair they could not save funds in their child's name without harming their eligibility for important benefits they may need. These accounts allow qualified individuals with disabilities the opportunity to save money in a tax-exempt account that can be used for qualified disability expenses (QDEs) without harming their eligibility for means-tested public benefits.
Who is eligible?
Starting January 1, 2026, the ABLE Age Adjustment Act expanded eligibility to individuals whose disability began before age 46, up from the previous cutoff of age 26. This change is estimated to make approximately 6.1 million more Americans eligible to open an ABLE account. Eligibility also requires meeting Social Security's definition and criteria regarding functional limitations.
How much can be contributed?
Starting January 1, 2026, the annual contribution limit increased from $19,000 to $20,000. If the ABLE account owner is working but not contributing to an employer-sponsored retirement plan, they may contribute up to an additional $15,650 (for continental U.S. residents) or up to their employment earnings, whichever is less. In that case, they could save up to $35,650 per year in their account.
Who can contribute?
Anyone can contribute to an ABLE Account, including family, friends, and the account holder themselves.
How can funds be used?
Funds must be used for qualified disability expenses to remain tax-free. A qualified disability expense is any expense related to the account owner's disability that assists them in increasing or maintaining their health, independence, and/or quality of life. It's always a good idea to save receipts for purchases in case the IRS has questions.
🚨 A note on the 2026 changes: This year brought some of the most significant updates to ABLE accounts since the program launched. If you've previously been told you or your loved one didn't qualify, it may be worth taking another look — especially with the expanded age eligibility. I'd love to help you figure out if an ABLE account makes sense for your family.