What the ABLE account is and who can open one

The ABLE account is a tax-advantaged savings account for people with disabilities. It was created under the Achieving a Better Life Experience (ABLE) Act, which Congress passed in 2014. The account lets you save money without losing means-tested benefits like Supplemental Security Income (SSI) or Medicaid — something that normally happens when your savings cross a certain threshold.

You can open an ABLE account if you have a disability that began before age 26 and you meet the Social Security Administration's definition of disability. The account holder must be at least 18 years old to open it themselves; a parent or guardian can open one for a minor. You can have only one ABLE account, and only one per person across all ABLE programs.

The term "Trump child savings account" refers to proposed expansions of ABLE accounts that would extend them to children with disabilities, though the scope and rules of any expansion depend on current legislation. The core ABLE account itself has been available since 2016.

Key Takeaways

  • An ABLE account lets you save up to $17,000 per year (as of 2023) without losing SSI or Medicaid, as long as the total account balance stays under $100,000.
  • You must have a disability that began before age 26 and meet Social Security's disability definition to open one.
  • A parent or guardian can open an account for a minor with a disability; the child becomes the account owner.
  • Each ABLE program is run by a different state or organization, so the investment options, fees, and enrollment process vary by which program you choose.
  • Once your account reaches $100,000, you lose SSI payments but keep Medicaid coverage, so you need a plan for what happens at that threshold.

How much you can save without losing benefits

An ABLE account has two separate limits that work differently. The first is the annual contribution limit — how much money you can put in per year. As of 2023, that limit is $17,000 per year. This includes contributions from you, family members, employers, or anyone else. Once you hit $17,000 in a calendar year, no more money can go in until January 1.

The second limit is the account balance threshold. You can keep an ABLE account open and keep receiving SSI as long as your total balance stays under $100,000. Once it reaches $100,000, your SSI payments stop — but your Medicaid coverage continues. This is the major advantage over a regular savings account: you lose one benefit but keep the other, which is not how regular means-tested programs work.

Money already in the account does not count toward the annual contribution limit in future years. If you contribute $10,000 in year one and it grows to $12,000 by year two, you can still contribute another $17,000 in year two. Only new deposits count toward the annual cap.

Which ABLE program to choose and how to open an account

ABLE accounts are not run by a single federal program. Instead, each state or organization operates its own ABLE program, and you choose which one to use. The major programs include ABLE Ohio, ABLE Kansas, ABLE Florida, and others. Some are run by state treasurers, some by nonprofit organizations. Each one has different investment options, different fees, and different enrollment processes.

To find the program available to you, visit the ABLE National Resource Center website, which lists all active programs and lets you compare them side by side. You can open an account with any program, regardless of where you live — you are not limited to your home state's program. Many people choose based on lower fees or better investment options rather than geography.

Once you pick a program, you will need to provide proof of your disability. Most programs accept a letter from Social Security showing you receive SSI or SSDI, or a letter from your doctor or disability information service. Some programs also accept a copy of your disability award letter. The enrollment process is usually online, though a few programs still require paper forms mailed in.

What happens to your SSI and Medicaid when you reach $100,000

The $100,000 threshold is a hard stop for SSI payments. The moment your account balance hits that amount, your SSI check stops in the next payment cycle. You do not get a warning or a grace period. This means you need to plan ahead if you are approaching that number — decide whether you want to stop contributing, spend money down, or let SSI end.

Medicaid works differently. Even after your account reaches $100,000 and SSI stops, you keep Medicaid coverage. This is unusual in means-tested programs and is one reason ABLE accounts are valuable for people with disabilities who need ongoing medical care. However, Medicaid rules vary by state, so check with your state Medicaid office about whether there are any other conditions that might affect your coverage once SSI ends.

Some people plan to let their account grow past $100,000 specifically because they want to keep Medicaid but do not need the SSI payment. Others set a target to spend down before hitting the threshold. There is no single right answer — it depends on your income, your expenses, and whether you have other sources of support.

Investment options and how your money grows

ABLE accounts are not just savings accounts — they are investment accounts. Each program offers a menu of investment choices, usually including money market funds, bond funds, stock funds, and target-date funds. Some programs also offer a plain savings option with a low interest rate and no market risk.

You choose how your money is invested when you open the account, and you can change your allocation later. The investment options vary significantly between programs. One program might offer 10 different funds; another might offer 3. Fees also vary — some programs charge annual management fees of 0.25% of your balance, while others charge 0.50% or more.

Any earnings your money makes — interest, dividends, capital gains — stay in the account tax-free. You do not pay federal income tax on the growth, which is a major advantage over a regular savings account. This tax-free growth is one of the core benefits of an ABLE account, especially if you plan to keep money in it for many years.

Using money from your ABLE account

You can withdraw money from your ABLE account at any time without penalty. There is no age restriction, no waiting period, and no limit on how much you can take out. Withdrawals do not affect your SSI or Medicaid as long as your account balance stays under $100,000.

Money withdrawn from an ABLE account can be used for any purpose — there is no restriction on what you spend it on. This is different from some other disability-focused savings programs that limit what the money can be used for. You can withdraw for medical expenses, education, housing, transportation, or anything else.

Each ABLE program offers different withdrawal methods: debit card, check, electronic transfer, or ATM access. Some programs charge a fee for certain types of withdrawals, so check your program's fee schedule. Withdrawals are usually processed within one to three business days.

Frequently Asked Questions

Can a parent open an ABLE account for a child under 18?

Yes. A parent or legal guardian can open an ABLE account for a child with a disability. The child is the account owner, and the parent is the account manager until the child turns 18 or reaches the age of majority in their state. At that point, the child takes control of the account.

What counts as a disability for ABLE account purposes?

You must have a disability that began before age 26 and meet the Social Security Administration's definition of disability. This includes people who receive SSI or SSDI, people approved for disability but not yet receiving payments, and people with a disability information from the Veterans Administration. You do not have to be receiving benefits — you just have to meet the definition.

Can I have an ABLE account and a 529 college savings plan at the same time?

Yes. An ABLE account and a 529 plan are separate accounts with separate contribution limits. However, if you are the beneficiary of a 529 plan and you also have an ABLE account, money you withdraw from the 529 for non-education expenses counts toward your ABLE account's annual contribution limit.

What happens to my ABLE account if I no longer may have access to for disability benefits?

Your ABLE account stays open and the money remains yours. You can keep using it and investing it. However, you lose the tax-free growth benefit — earnings become taxable at that point. You also cannot make new contributions once you are no longer disabled under Social Security's definition.

Do I need to report my ABLE account to Social Security?

Yes. You must report the account to Social Security when you open it. Social Security uses the account balance to determine whether you stay under the $100,000 threshold for SSI. Failure to report can result in overpayment of benefits and a debt you will owe back.