Planning for Your Disabled Child’s Future with ABLE Accounts

Dec 11, 2022 | Family

 When you have a disabled child, there are many things to consider when planning for their future. An essential tool available to families is something called an ABLE account. So what exactly is an ABLE account, and how can it help you plan for your disabled child’s future? Let’s take a look. 

What Is an ABLE Account? 

An ABLE (Achieving a Better Life Experience) account is a special savings account created by Congress in 2014 as part of the Achieving a Better Life Experience Act. This act aimed to make it easier for families of individuals with disabilities to save money without impacting their eligibility for certain government benefits such as Medicaid and SSI (Supplemental Security Income). 

ABLE accounts allow families to save up to $15,000 annually without affecting their child’s eligibility for certain government benefits. The account structure also offers tax advantages and other incentives to help parents plan for their child’s future. Contributions made into the account are not subject to federal income tax; earnings on those contributions are also tax-free when used for qualified expenses such as education, housing, transportation, or medical expenses. Additionally, suppose the beneficiary passes away or moves out of state. In that case, any remaining funds in the account can be rolled over into another eligible person’s ABLE account without penalty. 

Who Can Have an ABLE Account? 

In order to open an ABLE account, individuals must meet specific criteria set forth by Congress. They must be diagnosed with a disability before age 26 and receive benefits from either Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). In addition, they must also have significant limitations in at least one major life activity, such as walking, seeing, hearing, or self-care in order to qualify.  


An ABLE account is a great tool that parents can use when planning for their disabled child’s future. Not only does it provide an easy way to save money without affecting government benefits eligibility, but it also offers tax advantages and other incentives that can be helpful when making long-term plans. If you have a disabled child who meets the criteria outlined above, consider opening an ABLE account today! It could make all the difference when it comes time to plan ahead financially.


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