Millions of Americans with disabilities struggle to save money due to strict government benefit rules, but special bank accounts now offer a solution. These tax-advantaged accounts, known as ABLE accounts, allow individuals to save and invest without losing access to essential federal aid.
“ABLE accounts are life-changing for people with disabilities,” a financial advisor said. Created under the 2014 Achieving a Better Life Experience (ABLE) Act, these accounts help eligible individuals save up to $100,000 without affecting Supplemental Security Income (SSI).
Before ABLE accounts, people with disabilities could not have more than $2,000 in assets without losing government benefits. This rule made it nearly impossible for them to build financial security.
ABLE accounts allow deposits of up to $18,000 per year in 2024, and some states offer additional savings incentives. Families and friends can also contribute, helping individuals accumulate funds for long-term needs.
“Without this, we wouldn’t be able to save for emergencies,” said a mother whose son has an ABLE account. She noted that the funds help cover expenses like therapy, education, and medical equipment.
These accounts also allow investment options, enabling users to grow their savings over time. Unlike traditional savings accounts, ABLE funds can be used for housing, education, transportation, and healthcare without penalties.
More than 150,000 Americans currently have ABLE accounts, but experts say many more are eligible. Lack of awareness and confusion over state programs prevent wider adoption.
Each state manages its own ABLE program, with different rules and fees. Some states offer tax deductions or matching contributions to encourage participation.
Financial experts recommend comparing state programs before opening an account. Some states allow nonresidents to enroll, providing more options for individuals seeking lower fees or better investment choices.
“ABLE accounts are one of the best-kept secrets in financial planning,” a disability rights advocate said. He stressed the importance of spreading awareness so more families can benefit.
Eligibility is limited to people who developed a qualifying disability before age 26. A proposed bill in Congress, the ABLE Age Adjustment Act, seeks to raise the limit to 46, expanding access to millions more.
If passed, the new law could benefit veterans, individuals with later-life disabilities, and those with chronic illnesses. Supporters argue that increasing the age limit would create more financial independence.
For now, individuals who qualify can sign up online through their state’s ABLE program. Many states provide easy application processes with minimal paperwork.
Financial advisors encourage families to use ABLE accounts alongside other planning tools. Special needs trusts and life insurance can provide additional financial security.
Despite their advantages, ABLE accounts have some limitations. Withdrawals must be used for qualified disability expenses, and some programs charge maintenance fees.
Still, advocates say the benefits far outweigh the drawbacks. ABLE accounts provide an opportunity to break the cycle of financial insecurity for people with disabilities.
“These accounts give individuals control over their money,” a special needs attorney said. He emphasized that financial independence is key to improving quality of life.
Policymakers continue to explore ways to expand and improve ABLE accounts. Proposals include increasing contribution limits and reducing fees to make them more accessible.
Experts urge eligible individuals to research their options and take advantage of the program. With proper planning, ABLE accounts can provide long-term financial stability.
For many, these accounts offer a rare chance to build savings without risking essential benefits. Awareness and education remain crucial to helping more Americans with disabilities gain financial freedom.
