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Understanding 529 ABLE Plans on their 10th Birthday

May 15, 2024

In 2014, the U.S. Congress passed milestone legislation for the disability community: The Stephen Beck, Jr. Achieving a Better Life Experience Act (ABLE). The legislation allows people with disabilities to save money without risking the loss of their federal disability benefits.

Sadly, Mr. Beck did not see the fruits of his long years of labor bloom. At 44, he passed away just as the legislation was moving through Congress to become law.

Mr. Beck and other advocates in the disability community picked up on the success of the 529 college savings plans to create ABLE plans aimed at helping individuals with disabilities and their families save for qualified disability-related expenses.

Parents and students with disabilities face unique challenges with financial planning. Balancing medical expenses, caregiving costs, and maintaining financial security can be daunting, especially with rising inflation. Saving for college and unexpected costs on top of these expenses can seem almost impossible, especially given the restrictions placed on families with disabilities and federal programs.

In this blog post, we’ll look at the nuts and bolts of 529 ABLE plans, introduce you to some ABLE resources, and explain why ABLE plans are a game-changer for millions of Americans with disabilities.

What is an ABLE Plan?

An ABLE plan uses Section 529 of the Internal Revenue Service Code to help eligible people save without jeopardizing other federal disability benefits using accounts very similar to 529 Savings Plans. States, such as Virginia, which was the first, set up and administer the tax-advantaged ABLE savings account designed to help individuals with disabilities and their families save for disability-related expenses and educational expenses such as college.

Which states offer ABLE Plans?

46 states and the District of Columbia have launched ABLE programs.

According to ISS Market Intelligence (as of March 31, 2024):

  • 171,500+ ABLE accounts are open
  • $1.9+ billion is invested in ABLE plans

Not all U.S. states have an ABLE plan, two states have two plans, and some plans are limited to residents within that state. Use this map provided by the National Association of Treasurers’ “A+ Able today” initiative to learn about the ABLE plan available in your state.

How Do ABLE Plans Work?

ABLE plans allow individuals with disabilities to save money without jeopardizing their eligibility for certain benefits such as Medicaid, Supplemental Security Income (SSI), and other benefit programs. Contributions to the account grow tax-free and withdrawals are also tax-free when used for qualified disability expenses, which can include education, housing, transportation, healthcare, assistive technology, employment training and support, legal fees, and more.

Key Features and Benefits

  • Tax Advantages: Like 529 college savings plans, contributions to an ABLE account are made with after-tax dollars, but the earnings grow tax-free.
  • Asset Protection: Funds held in a 529 ABLE account are generally disregarded when determining eligibility for federal benefits like Medicaid and SSI, provided the account balance does not exceed $100,000. Additionally, ABLE account holdings will not affect benefits received from other programs including Social Security Disability Insurance  (SSDI), Housing Assistance from HUD, SNAP and others. Be sure to explore how your benefits may be affected before opening an account, including checking the official plan disclosure document for the applicable plan.
  • Control and Flexibility: Account owners, usually the individual with the disability, or their authorized representative retain control over the account and how the funds are used.
  • Contribution Limits: The total contribution limit for a 529 ABLE account varies by state but the annual limit is set at the annual federal gift tax exclusion limit ($18,000 for 2024) and may be adjusted for inflation. An employed ABLE account owner may be able to contribute more. To see specific annual contribution amounts by state, you can view the ABLE National Resource Center’s ABLE Account Contribution Limits for 2024.
  • Total contributions to a state’s ABLE plan are capped by each state. The account value may increase beyond the respective state caps. The cap is on the amount contributed to the beneficiary’s account.
  • Rollover Options: Funds from one 529 ABLE account can be rolled over tax-free into another 529 ABLE account for the same beneficiary or certain family members who are also eligible for ABLE accounts.
    • A recent update in January 2023, also allows parents who have saved money in a 529 savings account to roll over those funds into a 529 ABLE account for up to $18,000.
    • Both the 529 and ABLE accounts must have the same beneficiary, or the new ABLE beneficiary must be an ABLE-eligible “Member of the Family” of the 529 beneficiary as defined in Section 529 of the Internal Revenue Code.
  • You do not have to be a resident of a state to enroll in that State’s ABLE program as long as that state’s ABLE program permits out-of-state residents.
  • Families may have 529 College Savings Plans and ABLE accounts at the same time.

Who is eligible to set up an ABLE Account?

To be eligible for a 529 ABLE account, an individual must have a significant disability that occurred before the age of 26. On January 1, 2026, “before 26” will change to “before 46” because of the ABLE Age Adjustment Act, which passed in 2022.

Those receiving SSI or SSDI are automatically eligible to set up ABLE accounts. Those not receiving these benefits may still be eligible to establish accounts if they were disabled before age 26, meet the Social Security definition of disabled, and get a letter of disability certification from a qualified professional. An eligible individual may open and manage an ABLEnow account independently if they are over the age of 18.

More information

ABLE plans are required to periodically file updated disclosure documents. These documents are available on the plan web sites. The ABLE today Map tool provides links to both the plan sites and plan disclosure documents for each plan.

The U.S. Securities and Exchange Commission’s “Updated Investor Bulletin: An Introduction to ABLE Accounts” dated September 15, 2023 provides information and guidance on a variety of topics related to ABLE Accounts.

Another good source of information is the Municipal Securities Rulemaking Board’s “Investor’s Guide for ABLE Programs.” Note that it was published in 2019 so some of the information, particularly related to maximum contributions, may be outdated.

If you would like to learn more about a 529 ABLE plan, the ABLE National Resource Center has a comprehensive roadmap that provides step-by-step instructions on how to enroll.


ABLE plans empower parents and students with disabilities to achieve greater financial independence and security. By providing a tax-advantaged way to save for disability-related expenses while preserving eligibility for critical benefits, 529 ABLE accounts offer a lifeline to millions of Americans and their families.

As with any investment, be sure to understand the details and potential risks of opening an ABLE account.