October is Special Needs Awareness Month, an important time to highlight updates to a vital resource, Achieving a Better Life Experience (ABLE) accounts, which due to recent federal changes, will become more useful for more families.
What Is an ABLE Account?
The ABLE Act allows eligible individuals to save money in a tax-advantaged account for disability-related expenses — without jeopardizing eligibility for means-tested benefits. Funds in an ABLE account can be used for Qualified Disability Expenses (QDEs) like housing, education, healthcare, assistive technology, transportation, and more.
ABLE accounts are available in most states, and many programs allow residents of other states to enroll. Minimum deposit amounts and investment options may vary, but all follow the same federal guidelines.
New Federal Updates Expanding ABLE Access
Recent legislative changes are improving the way ABLE accounts work — with several key updates set to roll out between now and 2027:
- Expanded Eligibility (Starting 2026): Beginning January 1, 2026, individuals with a disability that began before age 46 will be eligible to open an ABLE account. This is a significant increase from the current cutoff of age 26, and it will allow millions more Americans — including veterans and those with later-onset conditions — to benefit from these accounts.
- Higher Contribution Limits: For 2025, the maximum annual contribution is increasing to $19,000 and may adjust in future years to keep up with inflation. Individuals who are employed and not participating in a retirement plan can contribute even more under the ABLE-to-Work provision.
- 529 Plan Rollovers Made Permanent: Families can now permanently roll over unused funds from a 529 college savings plan into an ABLE account, offering flexibility for families whose education plans have changed. These rollovers are not subject to income taxation, provided the amounts do not exceed the ABLE annual contribution limit.
- Federal Saver’s Credit (Coming in 2027): Starting in 2027, ABLE account contributions will be eligible for the Saver’s Credit, a tax benefit that can reduce tax liability for lower- and moderate-income individuals.
Why This Matters Now
With October recognized as Special Needs Awareness Month, these updates offer a timely opportunity to spread awareness about tools that support financial independence and dignity for individuals with disabilities. ABLE accounts can help cover critical needs today while building stability for the future and are an important addition to any estate plan for a family with a disabled, loved one.
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