As a financial advisor, I do all I can to stay current on the ever-changing rules and regulations related to the world of finance. I take pride in my understanding of these matters, but when a client recently asked me about changes to a particular type of savings account, I had to admit that I was not very knowledgeable about them. So, I got to work educating myself. Since I was not well versed in these accounts, there is a good chance many of you are not either. That’s why today I would like to share a little about Achieving a Better Life Experience (ABLE) accounts.
Part of the reason for the relatively low public awareness of ABLE accounts is that they serve a specific population, making them less likely to come up in ordinary financial conversations. Even families who could potentially benefit from one may not know they exist or how they can take advantage of the benefits they offer their loved ones.
ABLE accounts are tax-advantaged savings accounts that allow eligible people with disabilities to save and invest money for qualified disability expenses without jeopardizing certain means-tested government benefits, such as Supplemental Security Income (SSI) or Medicaid.
For the everyday family caring for a loved one with a disability, one of the biggest advantages of an ABLE account is its simplicity. A more complex special needs trust can be an excellent estate planning tool, but it generally requires an attorney to establish, an ongoing trustee to administer, and may give the beneficiary less direct control over the money.
An ABLE account, by comparison, can usually be opened and utilized without much effort or expense. It also allows family members and others to make tax-advantaged contributions to the account giving the beneficiary the ability to use the money for a broad range of qualified expenses, including housing, transportation, education and healthcare.
These accounts provide important financial advantages. For SSI purposes, up to $100,000 held in an ABLE account is generally excluded from the beneficiary’s resource limit. The money can be invested using a menu of market-related investment options, and the earnings grow tax-free when used for qualified expenses. While ABLE contributions are not deductible on the federal income-tax return, Missouri allows an annual state deduction of up to $8,000 per taxpayer, and in Kansas filers receive up to $3,000.
This year, the eligibility requirements for these accounts were significantly broadened. Beginning in 2026, an individual can qualify if the onset of the disability occurred before age 46. Previously, the disability generally had to begin before age 26. This means many people who would not have qualified for an ABLE account in the past may now be eligible.
If you are interested in learning more about ABLE accounts, visit the ABLE National Resource Center at www.ablenrc.org. The site allows you to learn more about eligibility, compare state ABLE programs and find links directly to individual programs. For additional information, the ABLE National Resource Center can also be reached at (202) 296-2040.
For families caring for a loved one with a disability, an ABLE account may not solve every financial challenge, but it can provide something just as valuable: greater flexibility, greater independence and one more way to plan for a loved one’s future with confidence.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)