What's Happening?
As of January 1, 2026, an estimated 6.1 million more Americans are now eligible to open and contribute to Achieving a Better Life Experience (ABLE) accounts. These tax-advantaged investment accounts are designed
for individuals with disabilities, allowing them to save for qualified expenses such as education, housing, and healthcare without affecting their eligibility for Medicaid or Social Security income. The eligibility expansion is due to the ABLE Age Adjustment Act passed in 2022, which raised the age limit for qualifying medical conditions from 26 to 46. This change increases the total number of eligible Americans to approximately 14 million. ABLE accounts function similarly to Roth IRAs, with contributions made using after-tax dollars and the potential for tax-free growth and withdrawals for qualified expenses.
Why It's Important?
The expansion of ABLE account eligibility is significant as it provides a larger segment of the disabled population with a powerful financial planning tool. By allowing more individuals to save without jeopardizing essential benefits, the policy supports greater financial independence and security for people with disabilities. This change could lead to increased economic participation and improved quality of life for millions of Americans. Additionally, the ability to save more than $2,000 without losing benefits is a crucial advantage, as it encourages long-term financial planning and stability.
What's Next?
With the expanded eligibility, financial advisors and state programs may see increased interest in ABLE accounts. States that sponsor these accounts, along with financial professionals, will likely need to provide guidance to new account holders on maximizing the benefits of these accounts. As more individuals become aware of their eligibility, there may be a push for further legislative changes to enhance the benefits and flexibility of ABLE accounts.
