Financial & Long-Term Planning for Special Needs Futures – 4. ABLE Act

Quick Overview

The ABLE Act allows individuals with disabilities to create tax-advantaged savings accounts that can be used for approved expenses such as education, housing, transportation, and personal support services. The maximum contribution per year is $15,000, and the total amount in the account is capped by the state. The ABLE account is a useful tool for short-term spending and can be funded with third-party money or the individual’s own earnings. It is important to understand the rules and limitations of the ABLE account and to track expenses to ensure compliance. The ABLE account can work in conjunction with a special needs trust to provide comprehensive financial planning for individuals with disabilities.


Hello everyone! Welcome to Protected Tomorrows. In this webinar, titled “The ABLE Act: Ready to Enable Savings for Life,” we will be discussing the ABLE Act and how it can be used for financial planning for individuals with special needs. I am Mary Anne Ehlert, the President and Founder of Protected Tomorrows.

Understanding the ABLE Act

The ABLE Act is a powerful tool that allows individuals with disabilities to save money in tax-advantaged accounts. It was created to address the limitations of having only $2,000 in assets while still being eligible for benefits. The ABLE Act allows individuals to create accounts similar to college savings plans, known as Section 529 accounts, which can be used for qualified disability-related expenses.

Key Features of the ABLE Act

Here are some important features of the ABLE Act:

  1. Tax-Free Savings: Contributions to ABLE accounts grow tax-free, and withdrawals are also tax-free as long as they are used for qualified disability-related expenses.

  2. Approved Expenses: ABLE accounts can be used for a wide range of expenses, including education, housing, transportation, job-related expenses, assistive technology, and personal support services.

  3. Onset of Disability: The individual must have had a disability before the age of 26 to be eligible for an ABLE account. Proof of disability can be provided through SSI, SSDI, compassionate allowance, or self-certification.

  4. Contribution Limits: The maximum annual contribution to an ABLE account is currently set at the federal gifting amount, which is $15,000. The total amount that can be held in an ABLE account varies by state but is generally capped at around $450,000.

Using the ABLE Account

It is important to understand how the ABLE account fits into your overall financial plan. While the ABLE account provides flexibility and tax advantages, it is not meant to replace a special needs trust. It is best to consult with a financial advisor or attorney to determine the most effective use of the ABLE account based on your specific circumstances.

Practical Uses of the ABLE Account

The ABLE account can be used in various ways to support individuals with disabilities:

  • Short-Term Expenses: The ABLE account can be used for day-to-day expenses such as transportation, rent, recreation, and personal support services.

  • Future Funding: The ABLE account can supplement other funding sources, such as special needs trusts, for long-term expenses like education, employment support, and housing.

  • Direct Deposit of Benefits: Social Security allows direct deposit of SSI and SSDI checks into ABLE accounts, making it easier to manage funds and stay within the asset limits.

Tips for Using the ABLE Account

Here are some practical tips for using the ABLE account effectively:

  1. Understand the Rules: Familiarize yourself with the rules and limitations of the ABLE account to ensure compliance and maximize its benefits.

  2. Track Expenses: Keep a record of how the ABLE account funds are used to provide documentation in case of an audit.

  3. Consider Investment Options: Evaluate the investment choices offered by different ABLE programs and select the ones that align with your risk tolerance and long-term goals.

  4. Coordinate with Special Needs Trust: If you have a special needs trust, ensure that it allows funding to the ABLE account to facilitate seamless financial management.


The ABLE Act is a valuable tool for financial planning for individuals with special needs. By understanding its features and limitations, you can effectively use the ABLE account to support your loved one’s long-term financial well-being. Stay informed about any updates or changes to the ABLE Act and continue to explore new ways to enhance your financial planning efforts.

Thank you for joining us in this webinar on the ABLE Act. We hope this information empowers you to secure a brighter future for your loved ones with special needs.

Talk details

  • Title: Financial & long-term planning for special needs futures – 4. ABLE Act
  • Author(s): Mary Anne Ehlert
  • Author(s)’ affiliation: Protected Tomorrows
  • Publication date: 2021-09-07
  • Collection: 2021 ASF Virtual Family Conference