6 million more Americans are now eligible to contribute to ABLE accounts
According to the National Institute on Disability, starting January 1, 2026, an estimated 6.1 million more Americans will be eligible to open and contribute to Achieving a Better Life Experience (ABLE) accounts.
ABLE accounts are tax-advantaged investment accounts designed for Americans with disabilities. Created by Congress in 2014, ABLE accounts allow beneficiaries to save for qualified expenses like education, housing, health care and more without affecting their Medicaid or Social Security income eligibility.
Previously, beneficiaries were required to have a qualifying medical condition that began before their 26th birthday, but this limit increases to age 46 from January 1. ABLE Age Adjustment Act Adopted in 2022. The expanded age requirement brings the total number of Americans eligible to open an ABLE account to nearly 14 million, according to NDI estimates.
Juliana Crist, head of ABLE programs at Vestwell, a financial technology company that manages 19 of the nation’s ABLE plans, tells CNBC Make It that ABLE accounts are “a powerful wealth planning, financial and tax planning tool.” Crist describes it as “kind of a super-powered Roth” individual retirement account.
As with Roth IRAs, contributions to ABLE accounts are made with after-tax dollars. Beneficiaries can invest the money tax-free in a growing portfolio, and qualified withdrawals are not subject to income taxes. But with ABLE accounts, beneficiaries can set aside more money per year and use the funds whenever they want, rather than waiting until they reach a certain age.
Withdrawals from an ABLE account for qualified expenses are not taxed as income. However, withdrawals due to ineligible expenses are subject to income tax and a 10% penalty.
Account holders can save up to $100,000 in an ABLE account without losing access to Supplemental Security Income and Medicaid benefits. People with savings exceeding $2,000 in regular savings or other investment accounts are at risk of losing these benefits.
Here’s how ABLE accounts work and who can open an account.
Eligibility conditions and contribution limits
ABLE accounts are available to U.S. citizens in all 50 states who qualify for Supplemental Security Income or Social Security Disability Insurance or can self-certify that they have a qualifying health condition.
“Many more people may qualify for an ABLE account than realize this,” says Crist. “People hear about this being a disability account, and that person may actually have a qualifying medical condition, but they don’t think of it as a disability… many of our eligible people don’t even realize that this could be a tool they can use.”
To self-certify, individuals must have a written diagnosis of a qualifying condition signed by a licensed physician, also verifying that the onset of the condition was before the individual’s 46th birthday.
Qualifying conditions include blindness as well as a variety of other conditions as defined by the Social Security Administration. physical and mental conditions Like Autistic Spectrum Disorder and Attention Deficit/Hyperactivity Disorder. Individuals are not required to provide proof of identification when opening an ABLE account, but they do need to confirm that they have an account. ABLE National Resource Center.
Beneficiaries can contribute up to $20,000 per year into the ABLE account in 2026. Individuals who are employed but do not contribute to a workplace retirement plan may contribute an additional amount equal to the individual poverty threshold ($15,650 in 2026) or up to employment earnings, whichever is less. This limit will increase to $19,550 for Alaska residents and $17,990 for Hawaii residents in 2026.
Almost anyone can contribute to a beneficiary’s ABLE account, including parents and other family members or employers. However, total contributions cannot exceed the annual limit.
How to choose the best ABLE account for you?
Nearly every state and Washington DC sponsors ABLE accounts, and most allow out-of-state participation. According to ABLE NRC. Four states (Idaho, North Dakota, South Dakota and Wisconsin) do not have their own plans. Depending on where you live and your personal financial situation, it may make sense to research different states’ plans; This is a search that could benefit from the help of a financial professional.
If you’re looking to open an ABLE account, Crist recommends starting your search with your state’s plan (if available). This is because some states offer state income tax deductions for ABLE account contributions.
“If you have questions or need support, sometimes it’s easier and more familiar to be able to reach out to someone in your backyard,” he adds.
From here, you’ll want to compare the investment options and costs of different ABLE accounts. In general, ABLE accounts have an annual management fee of around $30, Crist says. Plans may also charge a fee equal to 0.1% to 0.3% of the assets in your account, he says. Some plans offer more investment options than others, and this can be a deciding factor.
“Some states have much broader investment menus, such as 15 options to choose from, while other states offer only four investment options, simple and complex, so they can appeal to different types of savers and investors,” says Crist.
If you want a debit card added to your account, he adds, some plans offer that as well, but not all.
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