ABLE Accounts Expand to Millions More Americans in 2026

The Achieving a Better Life Experience (ABLE) Act has recently made significant changes to its eligibility rules, allowing millions more Americans to take advantage of tax-free savings and investing benefits. Previously, the age threshold for qualifying for an ABLE account was 26, limiting access to only 8 million people. However, as of January 1, individuals diagnosed with a qualifying disability by the age of 46 now qualify for ABLE accounts, expanding eligibility to approximately 14 million Americans.

ABLE accounts offer various tax benefits to those who qualify. In 2026, the contribution limit is $20,000, with an additional $15,650 available if the account holder does not have a 401(k) or other employer-sponsored retirement plan. Contributions can be invested, and the earnings grow tax-free. Importantly, the value of the account is fully exempt from means-testing rules for programs like Medicaid, federal student aid through the FAFSA, and Supplemental Security Income (up to $100,000).

Withdrawals from ABLE accounts are tax-free if used for qualifying disability-related expenses, housing, healthcare, wellness, or education. Withdrawals outside of these categories may incur a 10% tax penalty and be taxed as income. Despite the significant benefits of ABLE accounts, a relatively small number of eligible individuals have opened one. As of September 2025, only about 223,000 out of the estimated 8 million eligible Americans had opened an ABLE account.

To qualify for an ABLE account, individuals must have a qualifying disability that began before the age of 46. The disability must be severe, and individuals receiving Supplemental Security Income or Social Security Disability Insurance automatically qualify. Otherwise, a signed eligibility letter from a physician stating the long-term, severe nature of the condition is required.

ABLE accounts, also known as 529A plans, are operated at the state level, with 46 states currently offering ABLE plans. Each state may have varying maximum account balances and investment options. The recent age adjustment from 26 to 46 was a result of advocacy efforts since ABLE’s inception in 2014 and was enacted by former President Joe Biden in 2022 as part of a broader spending package.

Pennsylvania Treasurer Stacy Garrit, overseeing the state’s ABLE plans, emphasized the life-changing impact of the program. The expansion of ABLE account eligibility is expected to provide financial security and independence to millions more Americans living with disabilities.