Managing finances and planning for the future can be a challenge for individuals with disabilities, especially with limitations placed on how much they are allowed to save. That’s where ABLE (Achieving a Better Life Experience) accounts come in. These 529A tax-advantaged savings accounts are designed to help individuals with disabilities maintain financial independence without jeopardizing access to essential government benefits like Supplemental Security Income (SSI) and Medicaid.

For too long, people with disabilities couldn’t save for the future out of fear of losing government benefits. For those receiving Supplemental Security Income (SSI), the asset limit for an individual is $2,000, unchanged since 1989. To exceed this amount jeopardizes federal and state benefits.

The ABLE Act was passed by Congress in 2014, which now allows people with eligible disabilities to save for their everyday needs without losing their state or federal benefits. While this is good news, you may be surprised by how relatively few people have taken advantage of this benefit since the first ABLE accounts became available in 2016.

According to the Social Security Administration, as of January 2025, almost 5 million people receive SSI. However, as of 2024, only 187,000 people with disabilities have opened an ABLE account.

Who is eligible to open an account?

Whether the account is for you or a loved one, make sure the following statements are true:

• You, or the beneficiary was diagnosed with a disability before the age of 26 (the age of onset for disability will be raised to 46 starting January 1, 2026).

• The disability will last, or has lasted, at least a year.

• One of the following is true about you:

* Receive SSI or SSDI disability benefits, or meet SSI/SSDI’s definition of a disability

* Have a condition listed in the Social Security Administration’s List of Compassionate Allowance Conditions

* Experience blindness as determined by the Social Security Act; or

* Can produce a signed diagnosis form by a licensed physical if requested.

What are the benefits?

• You, or anyone who would like to, can contribute to your ABLE account, up to $19,000 per year in total (not per contributor). If you’re working, you can save even more.

* If you already have money saved in a 529 College Savings account, you can roll up to $19,000 of that money into an ABLE account annually, which counts towards the total $19,000 limit for that year.

• When you open and fund an account, you won’t lose your state or federal benefits.

• Both the earnings from your ABLE account and the money withdrawn for eligible expenses are tax free. In addition, money added to the account could qualify for a state income tax credit.

• An ABLE account is meant to help supplement your current benefits with a way to save for eligible expenses.

• If you receive SSI, you can have up to $100,000 in your account without counting toward the $2,000 asset limit. If you choose to go over the $100,000 limit, your SSI benefits will be suspended, but you’ll still be eligible for all other benefits (such as Medicaid). Once your balance drops below the limit, your SSI benefits will resume as normal.

What qualifies as an eligible expense?

You can use money from your account to cover things like basic everyday needs or an unexpected turn of events. Expenses are considered eligible if they are focused on improving health, independence and quality of life, including, but not limited to:

• Living expenses, including housing
• Education
• Transportation
• Employment training and support
• Assistive technology
• Personal support services
• Health prevention and wellness
• Financial management
• Administrative services
• Legal fees
• Oversight and monitoring
• Funeral and burial

Opening and managing an ABLE account

The account is fairly simple to open, and can be managed online, so it’s easy to access, contribute, withdraw, or load money to a prepaid card.

Here are a couple of sites that provide more information on opening an account:

https://www.ablenrc.org

https://www.ablenow.com

ABLE accounts were designed to be managed by the person with a disability. However, you can have someone else manage your account as an Authorized Legal Representative (ALR), which can include: a guardian, conservator, spouse, parent, sibling, grandparent, representative payee, or someone with power of attorney.

Most states offer an ABLE Savings account, but no matter where you reside, you can open an ABLE account in any state that accepts outside residents into their programs. Here are links to Oregon & Washington ABLE Plans:

https://oregonablesavings.com

https://www.washingtonstateable.com

Investment options

Both cash and investment funds can be held in an ABLE account.

Cash: This option protects your balance by putting all assets into an FDIC-insured account. With a low level of risk, there’s also a lower level of return.

Investments: If you decide to invest, there are three types of financial portfolios to choose from: Conservative, Moderate or Aggressive. Each person needs to decide which one is right for them, which your financial planner can help determine based on your individual goals.

ABLE accounts versus Special Needs Trust

Both ABLE accounts and Special Needs Trusts are designed to help individuals with disabilities while protecting eligibility for public benefits, but they serve different purposes and have different benefits. An individual with disabilities can have both, depending on the specific needs and goals, as well as their financial situation.

• As you’ve read, ABLE accounts are beneficial for individuals who need easy access to funds for everyday expenses and whose disability occurred before age 26. They’re a good option for people who don’t have a high level of assets and want more control over their finances.
• Special needs trusts benefit individuals who may need more substantial financial support over the long term or those who are receiving large inheritances or other lump sums. They are ideal for individuals with more complex needs who may require professional management of the funds.

If you think an ABLE account might be the right fit for your situation, a financial planner can help you assess your options, optimize your savings strategy, and ensure you’re making the most of available resources.

Note: Considering the slew of recent cost-cutting measures in federal programs, we understand concerns about various Social Security benefits. As of now, there is no indication that these budgetary changes will affect ABLE accounts or the benefits they provide. We will continue to monitor the situation closely to be ready to answer questions that arise.