ABLE Accounts: What You Need To Know

Achieving a Better Life Experience Act of 2014, or the ABLE Act of 2014, encourages and assists individuals with disabilities and their families in saving private funds in a tax-advantaged savings account.  These funds can be used to pay for education, health care, transportation, housing and other expenses. Here are some of the most frequently asked questions about ABLE accounts:


1. What is an ABLE account?

ABLE accounts are tax-advantaged savings accounts for individuals with disabilities and their families.  Similar to college savings 529 plans, the earnings from ABLE accounts do not get taxed. Many individuals with disabilities depend on public benefits for income, health care, and other assistance.  Eligibility for public benefits often requires meeting a means or resource test that limits eligibility of a beneficiary if they accumulate assets over $2,000.  An ABLE account gives eligible individuals and their families the ability to establish a savings account that will not affect their eligibility for SSI, Medicaid and other public benefits.


2. Have ABLE accounts always been around?

No, the federal ABLE Act of 2014 allowed for the creation of these accounts.  The bill was signed by President Obama in December of 2014.


3. Who is eligible for an ABLE account?

Individual beneficiaries are eligible to open an ABLE account if they meet Social Security’s definition and criteria regarding significant functional limitations and have a letter of certification from a physician.  Beneficiaries need to have the disability onset before the age of 26, but contributions can be made after the age of 26.


4. Are there limits on how much I can put in an ABLE account?

Yes, there are annual limits for each ABLE account.  Annual contributions per beneficiary are limited to the federal gift tax limitation.  Currently, this amount is $14,000 per year.  Many states have set a limit on the amount that can accumulate in an ABLE account.  In addition, the ABLE Act set some further limitations, stating the first $100,000 in ABLE accounts would be exempt from the $2,000 SSI individual resource limit.


5. How can I open an ABLE account?

Various institutions allow an eligible beneficiary to establish an ABLE account – some can even be opened online.  If you are an Illinois resident looking to open an account, visit the following website for more information and to get started:

ABLE accounts can be beneficial in providing a tax-advantaged way to provide additional resources for disabled individuals without impacting their eligibility for federal benefits. For more information on Illinois ABLE accounts, please visit the Illinois State Treasurers’ website at:

How Can DHJJ Financial Advisors Help?

If you have other questions on ABLE accounts and how it may impact your overall financial plan, please contact the DHJJ Financial Advisors.