Unlocking the Power of ABLE Accounts and Their Benefits for Individuals with Disabilities

The funding for these accounts can come from various sources, including personal savings, family, and friends. This flexibility means more resources to cover essential costs, offering dignity and financial stability to those who often face economic challenges.

If you are concerned about the financial future of your loved one with special needs or you’d like to establish one for yourself as an individual with special needs, you might have questions about how ABLE accounts work and how they can benefit your family.

At the Law Offices of Wenarsky and Goldstein, LLC, we understand how critical financial security is for individuals with disabilities and their families.  Our goal as special needs planning attorneys is to offer practical solutions that empower individuals with disabilities to live with greater independence and financial peace of mind.

Below, we share insights into how ABLE accounts work to help you make informed decisions as you take steps to secure the financial needs of your loved one. Read on to learn more.

This age limit will increase from 26 to 46 with effect from 2026, thanks to the enactment of the ABLE Age Adjustment Act in 2022.

Qualifying for Certain Federal Benefits

If the individual is already receiving Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI), they automatically qualify for an ABLE account. This is because these programs require a strict disability determination that aligns with ABLE account rules.

Disability Certification

If the individual doesn’t receive SSI or SSDI, they may still be eligible if they provide a “disability certification” signed by a licensed physician, which states their diagnosis and that they have marked/severe functional limitations that started before they turned 26.

The enrollment requirements may vary by state. For example, NJ has an additional eligibility requirement as an alternative for those who do not receive SSI or SSID or do not have a certification from a physician. Accordingly, a person is qualified to open a New Jersey NJ able account if they experience blindness as defined by the Social Security Act, that is, if they fail to qualify under the general eligibility requirements (besides age) stated above.

ABLE accounts also offer investment options, allowing the savings to grow over time. The investment funds in these accounts grow tax-free, which can help maximize the available money for disability-related expenses.

Preservation of Government Benefits

One of the most vital features of ABLE Accounts is their ability to preserve eligibility for key benefits like Supplemental Security Income (SSI) and Medicaid (subject to certain limitations). Despite accumulating savings, account holders remain eligible for these essential services due to the account’s unique structure. This ensures ongoing support while encouraging financial responsibility and independence.

Flexibility in Spending

ABLE Accounts offer incredible flexibility, allowing funds to cover a diverse range of needs. This includes expenses such as housing, healthcare, and employment training. From assistive technology to personal support services, the wide scope of qualified disability expenses caters to the varied needs of beneficiaries. By maintaining such flexibility, beneficiaries can manage their spending to address both immediate needs and future plans effectively.

Limitations of ABLE Accounts: How Much Can You Save?

There are limits on how much you can contribute and save in an ABLE account, and understanding these limits is key to using the account effectively.

Annual Contribution Limit

As of 2025, the total amount of contributions to an ABLE account cannot exceed $19,000 per year. This annual limit applies to all contributions combined, regardless of the source, which can include:

• The account holder’s own income.
• Family members, such as parents or siblings.
• Friends or third-party donors.

However, under the ABLE to Work Act Exception, able account holders who are employed may contribute above the annual limit if they meet certain conditions, such as not contributing to defined contribution plans, including 401(k)s.

Lifetime Account Balance Limit

Each state sets a lifetime account balance limit. This amount is set at $305,000 for New Jersey account holders. If the funds in the account exceed this limit, contributions may no longer be accepted. So, while there’s no federal cap on ABLE accounts, it’s essential to be mindful of your state’s maximum.

SSI Resource Limit

For individuals receiving SSI, ABLE account balances up to $100,000 are not counted as resources to determine eligibility for the benefit. If the account exceeds $100,000, SSI benefits will be suspended until the balance falls below this threshold. 

Medicaid eligibility is unaffected, even if the balance exceeds $100,000. However, if the account holder dies and there are funds in the account Medicaid may claim reimbursement from that amount if the account holder received Medicaid benefits while alive.

Another advantage of SNTs is that they can cover a broader range of expenses without the restrictions of “qualified disability expenses” that apply to ABLE accounts. While ABLE accounts focus on specific disability-related costs like housing, education, or healthcare, an SNT can fund more general expenses that enhance the individual’s quality of life, such as vacations, entertainment, or luxury items. This makes SNTs a good choice for families looking to provide a higher level of financial flexibility for their loved ones.

However, SNTs come with their own set of challenges. They are more complex to set up and manage compared to ABLE accounts, typically requiring the assistance of an attorney. Additionally, the ongoing management of the trust and involvement of a trustee may incur higher administrative fees. For individuals who don’t need to manage significant sums or who prefer a simpler, lower-cost option, an ABLE account might be a better fit.

Ultimately, ABLE accounts and Special Needs Trusts are not mutually exclusive and can often complement one another. An ABLE account can be used for short-term savings and daily expenses, while an SNT can manage larger sums or provide long-term financial security. Deciding which is better depends on your specific financial situation and planning goals. Our team at the Law Offices of Wenarsky and Goldstein, LLC, can help you weigh your options and create customized strategies that integrate both tools (if necessary )to maximize financial security and independence for individuals with disabilities.

Contact the Law Offices of Wenarsky and Goldstein, LLC

ABLE accounts are important financial tools that allow individuals with disabilities to save money for essential expenses without losing their eligibility for government benefits like Medicaid and SSI. These accounts offer tax-free growth, flexibility in spending, and a path to financial independence, helping individuals and families manage disability-related expenses such as healthcare, education, and housing.

While ABLE accounts have annual contribution limits and require funds to be used for qualified expenses, they are straightforward to set up and maintain, making them an accessible option for families looking to enhance financial stability. Their simplicity, coupled with their ability to protect federal benefits, makes them ideal for day-to-day financial management and short-term savings. They also pair well with other tools, such as special needs trusts, to create a comprehensive special needs plan that addresses both the immediate needs and long-term goals of individuals with disabilities.

However, navigating the complexities of creating an effective special needs plan with ABLE accounts and other related tools can be challenging. Legal guidance is important to ensure you make the most of this resource.

At the Law Offices of Wenarsky and Goldstein, LLC, we can work with you to help evaluate your options, ensure compliance with regulations, and create a comprehensive plan tailored to your loved one’s needs. From determining eligibility to aligning ABLE accounts with other special needs planning strategies such as special needs trusts or guardianship, our team can provide the personalized support you or your family needs to build a secure financial future for your loved one.

If you’re ready to explore how ABLE accounts can provide financial independence and peace of mind for your loved one, contact us today. Together, we can create a plan that improves your family’s peace of mind and empowers your loved one to face the future with confidence.