INSURANCE
more adults, including many veterans.“ The majority of accounts [ have been ] opened by parents, grandparents or caregivers,” says Michael Butterworth of MP Butterworth & Associates in Reading, Pa.“ Increasing the age to 46 will open up the number of eligible individuals by millions.”
Indeed, roughly eight million Americans were eligible for ABLE accounts last year. This year, that number is expected to swell to 14 million, experts estimate.
Since the first ABLE account opened in Ohio in 2016, the number and variety of account programs has skyrocketed. Today, all but four states( Idaho, North Dakota, South Dakota and Wisconsin) offer them( they’ re also available in Washington, D. C.). Altogether, there are now more than 223,000 ABLE accounts nationwide, holding an aggregate of nearly $ 3 billion in assets, according to the most recent data from research firm ISS Market Intelligence.
“ Once people understand how flexible and powerful ABLE accounts are, they’ re usually surprised they hadn’ t heard about them earlier,” says Mark Raymond Jr., national outreach coordinator at ABLE Today, an initiative of the National Association of State Treasurers in Washington, D. C.
Many financial professionals have never been trained to use them, he explains, and even families who know about them usually think they’ re either too complicated or aimed at someone else. This disconnect is surprising, since nearly 26 % of American families have at least one member with a disability, according to the last U. S. Census.
Part of the confusion may lie in the fact that every state program has different rules. The usage fees vary, and account maximums range from $ 235,000 to $ 596,925( those who receive Supplemental Security Income, or SSI, cannot have more than $ 100,000 in an ABLE account without losing their benefits). Some states accept applicants from other states; others don’ t. Some, but not all, offer members a debit card to easily access their funds.
And then the federal government sets its own parameters, such as annual contribution caps. This year, the cap rises to $ 20,000 from last year’ s $ 19,000. What’ s more, last July’ s One Big Beautiful Bill Act expanded and made permanent several provisions of the Obama law that were due to sunset: Account holders who have a job but don’ t participate in a workplace retirement plan will be able to contribute an extra $ 15,650 to their ABLE accounts($ 19,550 in Alaska and $ 17,990 in Hawaii). The accounts can now also make use of leftover funds from 529 college savings plans that are no longer needed for ed- ucation; these can be rolled over tax-free to an ABLE account up to the annual contribution limit, as long as it’ s for the same beneficiary or a qualifying family member.
And account holders who have jobs and contribute to their own accounts( as opposed to receiving only contributions from parents, say) will be able to take a nonrefundable tax credit of up to $ 1,050 in 2026( the exact amount will depend on adjusted gross income).
Still, even with these changes, ABLE accounts won’ t be appropriate for all clients. Their menu of investment choices is slim— rarely more than seven types of investment funds are available in them, depending on the state, says Michael Beloff of Belvedere Wealth Partners in Stamford, Conn.“ And you can only contribute cash, not appreciated securities.”
ABLE accounts were never intended to be particularly sophisticated, he adds; most of them are not sold through financial advisors but directly to consumers. Another drawback is that, in some state plans, the funds left in an ABLE account after the owner / beneficiary dies are subject to Medicaid“ payback” rules that require reimbursing the state for any Medicaid benefits received, he says.
The accounts are ideal, however, for those who want an easy, low-cost way to save without undermining their government benefits and who need to retain flexibility over their spending.
Clients who already have significant assets or need more complex management and financial oversight, he says, might be better served with a special-needs trust, another type of vehicle that shields assets for the disabled. Such trusts have no contribution limits and offer unlimited investment choices. But an attorney is required to set them up, and they often incur high ongoing administrative costs. Furthermore, in a special-needs trust, the disabled beneficiary relinquishes control over how funds are invested and how they are spent.
Fortunately, Beloff says, families don’ t have to choose one or the other. For the right client, ABLE accounts can complement a special-needs trust. Neither one has to replace the other.
44 | FINANCIAL ADVISOR MAGAZINE | JANUARY / FEBRUARY 2026 WWW. FA-MAG. COM