Setting up an ABLE account is a straightforward process that provides individuals with disabilities and their families a valuable tool for saving and investing while preserving access to essential government benefits. This guide will walk you through the steps needed to open an ABLE account and begin planning for the future.
An ABLE account, or Achieving a Better Life Experience account, is a tax-advantaged savings account specifically designed for individuals with disabilities. These accounts allow beneficiaries to save money for qualified disability expenses (QDEs) without impacting their eligibility for government benefits like Supplemental Security Income (SSI) or Medicaid. Funds in an ABLE account can be used for a variety of expenses, including housing, education, transportation, healthcare, and assistive technology. ABLE accounts are managed by state programs, making it important to research the options available.
Before opening an ABLE account, ensure that the individual meets the eligibility criteria. To qualify, the person must have a significant disability with an onset before age 26 and meet the criteria for receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). Alternatively, a physician’s certification can confirm the disability. Gather the necessary documentation, such as proof of SSI/SSDI benefits or a physician’s certification, to confirm eligibility. As of January 1, 2026, the age of onset increases from age 26 to age 46.
ABLE accounts are administered by state-specific programs, each with its own rules, fees, and investment options. While individuals can open an account in any state’s program that accepts out-of-state residents, it’s a good idea to compare programs to find one that best fits your needs. Factors to consider include account fees, available investment options, and state tax benefits (if applicable). A directory of state ABLE programs is available online for comparison.
Once you’ve chosen a program, visit the program’s website to open the account. Most programs allow you to complete the process online. You will need to provide proof of eligibility, such as SSI/SSDI documentation or physician certification, personal details of the account beneficiary, and contact information for an authorized individual, if applicable. Also have the routing and account number handy for any account you would like to link to the ABLE account to make contributions or withdrawals.
After opening the account, you can begin making contributions. Contributions can come from the beneficiary, family members, friends, or other sources. The annual contribution limit is $19,000 (as of 2025), and beneficiaries who are employed may contribute earned income under the "ABLE to Work Act" up to an additional $15,060. However, this earned income is still countable for SSI benefit eligibility criteria; placing the funds in the ABLE account renders the funds exempt as resources. Many programs offer multiple ways to fund the account, such as direct deposits, one-time or recurring electronic transfers, or checks.
Once the account is funded, the beneficiary or an authorized individual can manage it through the state program’s online platform. Management typically involves choosing investment portfolios, monitoring account performance, and tracking withdrawals to ensure funds are used for qualified expenses.
Withdrawals from an ABLE account must be used for qualified disability-related expenses to maintain the account’s tax-advantaged status. These expenses can include housing, education, healthcare, transportation, and more. Misuse of funds could result in tax penalties and may impact eligibility for benefits.
Setting up an ABLE account is a powerful step toward financial independence and security for individuals with disabilities. By following these steps, you can ensure that your loved one has the resources they need to thrive while maintaining access to critical assistance programs. Should you require any assistance with this process, Michigan Law Center has years of experience and can expertly guide you.
For more details on ABLE accounts and their benefits, watch our free webinar, Gifting to Persons with Disabilities Through ABLE Accounts.
