For many, financial independence and literacy are essential pillars of building or maintaining a high quality of life. But due to the limitations of certain government programs, it can be challenging for individuals with disabilities to avoid relying on others for financial support. As of 2024, more than 8 million people in the United States receive Social Security Disability Insurance (SSDI) benefits. However, if a beneficiary’s countable assets become greater than $2,000, they could risk losing several needs-based government benefits, such as Medicaid and Social Security. This restriction makes it incredibly difficult for the millions of Americans who rely on such benefits programs to manage their health and lifestyle, and to save money and garner financial stability.  

But there is good news: As part of The Stephen Beck, Jr., Achieving a Better Life Experience (ABLE) Act of 2014, ABLE Accounts now offer the opportunity to invest and save money without disrupting federally-funded benefits. With ABLE, qualifying individuals can allocate money into a designated account and utilize the funds for qualified disability expenses (QDEs), from housing, education resources, and employment coaching to medical or wellness expenses, assistive technology, and legal fees.  

The Internal Revenue Service (IRS) ultimately determines what an eligible expense is, but QDEs are defined broadly as long as they are enhancing the beneficiary’s independence and quality of life. A participating individual whose ABLE account that remains less than $100,000 will maintain their eligibility for critical government programs, such as Medicaid, Social Security, FAFSA (Free Application for Federal Student Aid), SNAP (Supplemental Nutrition Assistance Program), and VRS (Vocational Rehabilitation Services).  

ABLE Accounts are not just for saving; they also offer an opportunity to invest and expand one’s financial portfolio. Most will offer multiple investment options, from conservative to aggressive, and they promote financial independence and decision-making opportunities for individuals with disabilities. It is also important to note that while contributions to ABLE accounts are not deductible for federal tax purposes, their distributions, including earnings, are tax-free to the beneficiary if used for qualified disability expenses. 

When considering this opportunity, keep in mind the eligibility criteria and regulations of the program. Currently, to be eligible to open an ABLE account, you must have acquired your disability before age 26. However, starting in January 2026, the minimum age of disability onset will be increased to 46. This means that disabled Veterans can save and invest with an ABLE account tax-free without losing access to VA or other critical benefits.  Receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits automatically establishes eligibility. Alternatively, self-certification of disability is also possible with a signed diagnosis from a licensed physician. This diagnosis must include a statement by the provider that there are “marked and severe” limitations that began before the age of 26, or age 46 beginning in January 2026. The account will be in the individual’s name but can be funded by anyone — and there are no income limits on those who open or contribute to an account.  

While the maximum annual contribution is subject to change every year, the limit for 2025 contributions is $19,000. In certain circumstances, you can contribute above that limit via the ABLE to Work provision, but this provision won’t be available after 2025. In addition, the ABLE Financial Planning Act passed by Congress in 2018 allows contributions to include funds rolled over from 529 College Savings Plan plans up to the $19,000 limit.  

Another key factor to understanding ABLE programs is that they are run by individual states, which means some aspects of the program vary based on location, including eligible investment managers and investment options. Certain states allow tax credits or state income tax deductions for ABLE contributions by state residents, while others do not. Several minor aspects differ as well, such as minimum contribution requirements or the amount of monthly ACH withdrawals permitted per account. To compare state guidelines and see your state’s individual ABLE account regulations, visit Compare States — ABLE National Resource Center.  

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