ABLE Accounts Expand to Millions of Americans by 2026
The single-use savings account for people with disabilities recently relaxed its eligibility rules, extending tax-free savings and investment benefits to millions more Americans.
As of Jan. 1, tax-advantaged ABLE accounts — named after the Better Living Act of 2014 — are available to Americans diagnosed with a qualifying disability at age 46.
Previously, the age limit was 26, limiting account access to 8 million people. Now, about 14 million Americans may qualify for one, according to the National Disability Institute.
The accounts come with a host of tax benefits for those who qualify. In 2026, the contribution limit is $20,000, and up to an additional $15,650 if you don’t have a 401(k) or other employer-sponsored retirement plan.
Donations can be invested, and profits grow tax-free. What’s worse, the amount of the account is completely exempt from the means test rules for Medicaid and federal student aid through FAFSA. In the Supplemental Security Income Plan, up to $100,000 is excluded.
ABLE withdrawals are tax-free as long as the money is used for expenses related to disability, housing, health care, wellness or education. (Withdrawals outside of these categories incur a 10% tax penalty and are taxed as income.)
Despite the benefits, few qualified people sign up for one. By the end of September 2025, of the estimated 8 million eligible Americans, approximately 223,000 of them opened an ABLE account.
Who is eligible for ABLE accounts?
ABLE accounts are now available to US residents with qualifying disabilities that begin before age 46, or about 14 million Americans.
The disability must be severe to qualify. If you receive Supplemental Security Income or Social Security Disability Insurance, you are automatically eligible. Otherwise, the main qualification is a signed fitness letter from your doctor stating that your condition is long-term, “marked and severe.”
Similar to 529 college savings plans, ABLE accounts — formally known as 529A plans — are operated at the state level. Currently, 46 states offer ABLE programs, which are administered by partner banks and investment firms. Idaho, North Dakota, South Dakota and Wisconsin do not offer ABLE accounts. However, many programs accept out-of-state applicants. Eligible applicants may have only one account.
Although the core qualifications are the same across the country, there are differences between state programs. That is, the maximum account balance varies by state, typically running between $300,000 and $600,000. Affiliated banks and investment firms often vary by state, with most states offering between four and eight investment options.
The age adjustment from 26 to 46 has been a long time coming. After years of pushback from lawmakers since ABLE’s creation in 2014, the 46-year limit was struck by former President Joe Biden in 2022 as part of a $1.7 billion spending package. That legislation also included the SECURE 2.0 retirement reform bill, as well as changes to ABLE’s sister account — the 529 college savings plan. The ABLE changes didn’t go into effect until this month.
“It’s no exaggeration to say that ABLE is a life-changing savings program,” Pennsylvania Treasurer Stacy Garrit, who oversees the state’s ABLE programs, said at the time. “[A]and the ABLE Age Adjustment Act will have a very positive impact.”
“It will help millions of Americans with disabilities, including 1 million veterans,” he added, “by providing financial strength and increased independence.”
More from Mali:
Can Trump Actually Raise Credit Card Interest Rates to 10%?
Pell Grants Will Soon Help Students Pay for Career Training Programs
It’s Now Easy for Millions of Americans to Get a Tax Break for Charitable Donations
