Accounts way to empower Americans with disabilities

By EllaVincent

Kiplinger’s Personal Finance

If you have a family member with a disability, you’re probably aware that a disabled person’s financial situation can easily become precarious.

ThemaximumSupplemental Security Income benefit, which is available for low-income individualswhohave a disability, is just $967 a month, according to the Social SecurityAdministration. And your loved one may be ineligible for the benefit if they have more than $2,000 in assets.

Achieving a Better LifeExperience accounts, created in 2014, allowindividuals with disabilities to save for ongoing expenses without jeopardizing their disability benefits.

Anyonewhoreceives payments through SSI or Social Security Disability Insurance (which provides benefits based on an individual’swork history) orwhocan produce a certification froma doctor stating that their disability is "marked and severe," can open anABLEaccount, as long as their disabilitywas diagnosed before age 26. Starting in 2026, those whose disability was diagnosed before age 46 will qualify. Advocates estimate that expanding the age range willmake an additional 6 million individuals, including 1 million veterans, eligible for the accounts.

TomFoley, executive director of the National Disability Institute, saysABLE account funds can be used to improve disabled people’s lives inmanyways, including paying for rent or a mortgage, buying a motorized wheelchair or contributing to education costs.

If a college-age beneficiary develops a disability while in school and has unused funds froma 529 college-savings plan, they can roll the money into anABLEaccount without incurring taxes or penalties.

Contributions to anABLEaccount are after-tax (though some states offer tax deductions). But the money grows tax-free, and distributions aren’t taxed if they go toward qualified expenses. Most plans offer investment portfolios ranging from conservative to aggressive, so account owners can choose one that suits their risk tolerance and time frame.

Anyone can contribute to a disabled person’sABLEaccount, including family members and friends, as long as they don’t exceed themaximumcontribution, which is $19,000 per person in 2025.

All states but four— Idaho, North Dakota, SouthDakota andWisconsin— offerABLEaccounts to residents. If your loved one lives in one of those four states, they can apply for an account in one of the states that permit nonresident applications.

Some states offer tax deductions for residentswhocontribute to their ownstate’s plan. Michigan, for example, allows residentswhocontribute to itsABLEaccount to deduct up to $5,000 (or $10,000 for a married couple). Maryland allows residents to deduct up to $2,500 in contributions, or up to $5,000 for joint filers. You can research stateABLEaccounts atwww.ablenrc.org/select-a-state-program.

To apply for anABLEaccount, your loved one will need to provide their Social Security number, bank account information and proof of disability. If the beneficiary is unable to manage the account, you can request authority to act as the individual’s representative.

SSI benefits may be reduced or suspended if the account’s assets exceed $100,000, although eligibility can be restored if the balance falls belowthat amount. If the beneficiary dies and funds remain in theABLEaccount, the state may claim the money as reimbursement for the beneficiary’sMedicaid benefits.

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