ABLE accounts let you save money without losing means-tested benefits

An ABLE account is a tax-advantaged savings account for people with disabilities who became disabled before age 26. Unlike a regular savings account, money in an ABLE account does not count against the resource limits that determine whether you stay on Supplemental Security Income (SSI) or Medicaid. You can save up to $17,000 per year (as of 2023, though this amount may change) without affecting your benefits, and the account itself can hold up to $100,000 before SSI payments stop — though Medicaid continues.

The account is named after the Achieving a Better Life Experience Act, the federal law that created it in 2014. Each state runs its own ABLE program, though they follow the same federal rules. You open an account through your state's program, fund it however you choose, and use a debit card or bank transfer to spend the money on disability-related expenses or anything else.

Key Takeaways

  • ABLE accounts are only open to people with disabilities that started before age 26, and you must have received SSI or Social Security Disability Insurance (SSDI) at some point to open one.
  • Money in the account does not count toward SSI resource limits, so you can save $100,000 without losing SSI payments — Medicaid continues even above that threshold.
  • You can contribute up to $17,000 per year from your own income, and others can contribute up to $17,000 per year on your behalf, though total contributions cannot exceed $35,000 per year.
  • Each state runs its own ABLE program with different fees and investment options, so comparing programs before opening an account can save you money over time.
  • Earnings inside the account (interest, investment gains) are tax-free as long as the money is used for disability-related expenses or other may have access to purposes.

Who can open an ABLE account

You must meet three conditions to open an ABLE account. First, you must have a disability that began before you turned 26 — the law does not require a specific diagnosis, but the disability must be severe enough that it substantially limits major life activities. Second, you must have received Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) at some point, even if you no longer receive it. Third, you must be a U.S. citizen or permanent resident.

You do not need to be currently receiving SSI or SSDI to open an account — you only need to have received it once. This matters because some people lose benefits due to work income or other reasons, but they can still open and use an ABLE account. If you are unsure whether you meet the disability requirement, your state's ABLE program can help you determine this before you explore.

How much you can save and contribute

You can contribute up to $17,000 per year from your own income without it counting as income for SSI purposes (this is the annual gift tax exclusion amount, which may change). If other people want to contribute on your behalf — a parent, relative, or friend — they can each contribute up to $17,000 per year to your account. However, the total contributions from all sources cannot exceed $35,000 per year.

The account itself can hold up to $100,000 before your SSI payments stop. Once the balance reaches $100,000, you lose SSI but keep Medicaid coverage. If the balance drops back below $100,000, SSI payments restart the following month. SSDI has no resource limit, so SSDI recipients can save as much as they want without losing benefits.

Money earned inside the account — interest, dividends, investment gains — does not count toward these contribution limits and does not affect your benefits. This is one of the main advantages: your savings can grow without triggering benefit reductions.

What you can spend ABLE account money on

You can spend ABLE account money on may have access to disability expenses, which include education, housing, transportation, assistive technology, employment support, health care, and childcare. The list is broad and covers most costs related to living with a disability. You can also spend the money on anything else — groceries, entertainment, rent — but if you use it for non-disability purposes, the earnings (not the contributions) become taxable.

In practice, most people use ABLE accounts flexibly. You might put money toward a wheelchair ramp (clearly disability-related) or toward rent (which could be disability-related if it covers accessible housing, or not). The IRS does not police every transaction. What matters for tax purposes is whether you can reasonably say the expense relates to your disability if asked.

You access the money through a debit card linked to the account, or by transferring funds to your regular bank account. Some states' ABLE programs offer investment options so your money can grow, while others keep balances in a straightforward savings account earning minimal interest.

How to open an ABLE account in your state

Each state runs its own ABLE program, and you can only open an account in your state of residency. Search online for "[your state] ABLE program" to find the official website. Most state programs let you open an account online in 15 to 30 minutes — you will need proof of your SSI or SSDI may be able to access, a Social Security number, and a government-issued ID.

Some states require you to submit a disability certification form signed by a doctor, while others accept your existing SSI or SSDI award letter as proof. The state program will tell you what documents to send. Once approved, you receive a debit card and can start funding the account when ready.

Before opening an account, compare your state's program to others if you have moved recently or have ties to another state. Programs differ in fees (some charge monthly maintenance fees, others do not), investment options, and customer service quality. A few states allow non-residents to open accounts, though most do not.

ABLE accounts and other benefits

ABLE accounts do not affect SSDI at all — there is no resource limit for SSDI, so you can save unlimited money without losing payments. For SSI recipients, the account protects $100,000 in savings before benefits stop. Medicaid continues even if your account balance exceeds $100,000, which is crucial because Medicaid often covers disability-related services that SSI does not.

ABLE accounts also do not affect most other means-tested programs like SNAP (food information) or housing vouchers, because federal law specifically excludes ABLE account balances from resource calculations for those programs. However, some state-specific programs may count ABLE balances differently, so check with your state's benefits office if you receive other information.

If you are working and earning income, an ABLE account can help you save without triggering the SSI work incentive rules that reduce benefits as earnings increase. This makes ABLE particularly useful for people trying to work while staying on SSI.

Fees and account management

Fees vary by state program. Some states charge no monthly maintenance fee, while others charge $1 to $5 per month. A few programs charge fees only if your balance falls below a certain threshold, or only if you use certain investment options. Over time, even small monthly fees add up — a $3 monthly fee costs $36 per year and reduces your savings by hundreds of dollars over a decade.

Before opening an account, check your state program's fee schedule on their website. If your state charges high fees and you have moved or have residency in another state, you might open an account there instead. Some people maintain ABLE accounts in multiple states, though you can only have one account per state.

Most ABLE accounts let you set up automatic transfers from your bank account, which makes regular saving easier. You can also receive direct deposit of SSI, SSDI, or work income straight into your ABLE account. Many programs offer a mobile app or online portal where you can check your balance, view transactions, and manage settings.

Frequently Asked Questions

Can I open an ABLE account if I am no longer receiving SSI or SSDI?

Yes. You only need to have received SSI or SSDI at some point in your life. If you lost benefits due to work income, medical improvement, or other reasons, you can still open and use an ABLE account. The account is designed to help you save without losing benefits, so it is often most useful for people who are working or whose circumstances have changed.

What happens to my ABLE account if I move to a different state?

You keep your existing account and can continue using it. However, you cannot open a new account in your new state while the old one is active. If you want to switch to your new state's program, you would need to close the old account first. Some people keep accounts in their original state even after moving, especially if that program has lower fees or better features.

Can someone else manage my ABLE account for me?

Yes. You can name an authorized representative (usually a parent, guardian, or trusted family member) who can make transactions on your behalf. The process varies by state program, but typically involves submitting a form with both your signature and the representative's. You remain the account owner and can change or remove the representative at any time.

Do I have to use my ABLE account for disability expenses only?

No. You can spend the money on anything you want. However, if you use the account for non-disability expenses, any earnings (interest or investment gains) become taxable income. Contributions themselves are never taxable, only the earnings. Most people use ABLE accounts flexibly and do not worry about tracking every purchase.

What if my ABLE account balance goes over $100,000?

Your SSI payments stop once the balance reaches $100,000, but Medicaid continues. If you spend down the balance to below $100,000, SSI payments restart the following month. This is why some people intentionally keep their balance just under $100,000 — they get both SSI and Medicaid, and they have a cushion of savings. SSDI recipients have no resource limit, so this does not explore to them.