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ABLE Accounts For Disability Are Expanding In 2026
ABLE accounts remain one of America’ s most underutilized tax savings vehicles. By Ben Mattlin
TO SOME ADVISORS, THEY ARE ONE OF THE MOST underutilized tax-advantaged savings vehicles out there. Others have rarely if ever considered recommending them to clients. But ABLE accounts may finally come out of the shadows this year, when eligibility opens up to millions more people for the first time.
Here’ s what advisors need to know.“ Many clients and even some advisors are unfamiliar with the program, its eligibility rules and the tax-free benefits it offers,” says Nicky Amore, a certified financial planner at Parallel Advisors in Chicago.
ABLE accounts help clients save for necessary disability-related expenses that aren’ t covered by insurance or other sources, and do so without jeopardizing their eligibility for needs-based benefits programs such as Medicaid, traditional Medicare, Social Security Disability Insurance, federal financial aid for college, subsidized housing and the SNAP food-assistance program.( The federal cutoff for Medicaid, for instance, is a mere $ 2,000 in savings for indi- viduals and $ 3,000 for couples, but ABLE accounts can hold more than those amounts without penalty.)
Like 529 college savings accounts, the assets in an ABLE account can grow tax-free, and account holders can make withdrawals without taxes or penalties for qualified expenses— including the costs of wheelchairs, ramps, hearing aids or print readers for those who are blind. Contributions can be made by the account holders themselves or family members. These contributions can’ t be deducted from federal income taxes, but some states allow state-tax deductions.
The accounts were created during the Obama administration under a law enacted in 2014 called the Achieving a Better Life Experience Act. They were exclusively for the benefit of people who became disabled before age 26, but as of January 1, 2026, the age limit increases to 46( as mandated by a 2022 measure passed during the Biden administration).
The expansion is aimed at making ABLE accounts available to
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