ABLE Accounts: Because Disabled People Need Yet Another Overly Complicated, Underwhelming Solution to a Problem We Didn’t Create
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ABLE Accounts (Achieving a Better Life Experience) are tax-advantaged savings accounts for individuals with disabilities, created under the ABLE Act of 2014. They allow disabled individuals to save money without jeopardizing federal benefits like Medicaid or Supplemental Security Income (SSI) through a complex maze of strict rules, harsh penalties, and professional strength obstacle course. Because apparently, the hardship of having a disability just isn't enough suffering to endure.
Here’s a detailed overview of the rules, because of course there are many rules.
Who Can Open an ABLE Account?
To qualify for an ABLE account, an individual must meet the following criteria:
Disability Onset: The disability must have started before age 26, because only children are disabled? Huh?
Oh, but don’t worry! In 2026 (only 12 years after passing the law!), they’ll graciously bump the age limit to 46, because progress moves at the speed of molasses.
Eligibility: The individual must:
Be receiving SSI or SSDI, OR
Meet Social Security’s definition and criteria for “significant functional limitations” and get a certified letter from a doctor.
Translation: You need to be disabled enough to qualify but not too disabled to deal with all this paperwork.
Note: If you became disabled before age 26 but are now older, you can still open an account. Congratulations on clearing Level One!
Contribution Limits to ABLE Accounts
Because nothing says “empowerment” like arbitrary financial caps.
Annual Limit: You can only save up to $18,000 per year (2024). Yes, that’s all sources combined—you, family, friends, employers, anyone. Sounds like a lot until you realize this is the only savings you can have - no college fund - for you or your kids (yes, people with disabilities are parents!) no retirement saving in a 401(k), IRA, or pension (are those even still a thing?) nothing.
Additional Contributions: If you’re working, you can contribute a little more, up to your annual earnings or the federal poverty level (around $14,580 in 2024, because raising the federal poverty level isn't Christian - or something).
Lifetime Limit: Each state sets a total account limit between $235,000 and $550,000. Sounds generous until you realize it takes
28 percent more income to obtain the same standard of living as a similar household without a member with a disability.
SSI Limit: If your ABLE account balance exceeds $100,000, your SSI benefits are put on hold until you spend it back down.
So, let’s recap: Save money, but not too much. Because if you dare to plan ahead, the government’s ready to pull the rug out from under you faster than you can say “forced poverty.”
ABLE Accounts: Because Assets are Barely Legal to Exist
Qualified Expenses Under ABLE Rules
ABLE accounts can be used for Qualified Disability Expenses (QDEs), which are things that improve your health, independence, or quality of life. Don’t get too excited, though—if you stray from the list, there are penalties!
Examples include:
Housing: Rent, mortgage, utilities, and property taxes. Transportation: Vehicle purchases, modifications, and public transit.
Healthcare: Medical expenses, assistive technology, and therapy. (You know, the essentials your medical insurance doesn't actually cover.)
Education: Tuition, books, and tutoring.
Basic Living Expenses: Food, clothing, and other basics. (This sounds vague. Is makeup a basic living expense? Can I shop at Saks or am I limited to Walmart fashions? This sounds like an easy place to unknowingly rack up penalties.)
Employment Support: Job coaching and training.
But don’t spend it on anything unapproved, like, say, a vacation to escape this mess. That’ll earn you a 10% penalty and taxes on the withdrawn amount.
I wonder who has that job? "Hi! I'm Sally, I scrutinize every dollar poor sick people spend to make sure they never, ever, get their hands on anything that might be considered fun or luxury."
ABLE Accounts: Because ABLE-Bodied is for Lucky Elites
ABLE Account Investment Options
Because what every disabled person really wants is to become an amateur stock trader.
Funds can be invested in mutual funds or index funds.
Options range from low-risk (bonds) to high-risk (stocks).
You can change your investment strategy twice per year. Twice. Why is this a rule? How is this a necessary restriction? Able-bodied people can move their money as much as they want without government penalties and rules.
Hot Tip: If you lose money in the market, the government won’t care. They not going to cut you a check for your loss. But they won't hesitate to penalize you for having too much money in your account when the S&P hits record highs again.
Tax Advantages
ABLE accounts offer tax perks, because throwing us a bone makes a good sound-bite for the complacent voters:
Tax-Free Growth: Your investments grow tax-free.
Tax-Free Withdrawals: As long as you spend on "qualified" expenses, Uncle Sam won’t touch it, because freedom is only for the rick. When you're poor, every choice you make with your money will be judged.
Non-Qualified Expenses: If you mess up, not only will you pay income tax, you’ll also get smacked with a 10% penalty.
State Tax Benefits: Some states offer additional tax deductions for contributions to ABLE accounts.
Because clearly, disabled individuals need even more financial landmines to navigate.
Effect of ABLE Accounts on Benefits
ABLE accounts are supposed to protect your access to benefits, but only if you follow all the rules:
SSI: Up to $100,000 doesn’t count toward the $2,000 asset limit. Go over that? Benefits suspended.
Medicaid: ABLE accounts won’t impact eligibility for Medicaid or Medicaid waiver services… unless you die. (More on that soon.)
Any amount of ABLE savings up to the plan limit, will NOT affect eligibility for:
Social Security and Disability Insurance (SSDI), or
Housing Assistance – Housing and Urban Development programs (HUD),
Supplemental Nutrition and Assistance Program (SNAP),
Free Application for Federal Student Aid (FAFSA),
Medicare Parts A, B, C, or D, Medicare Savings Programs, and Extra Help, or
So you can save money without losing benefits, unless you save too much. Got it?
ABLE Accounts: Because only Assets Below Livable Expectations are allowed.
Ownership and Control of ABLE Accounts
The account owner is the individual with the disability. If the account holder cannot manage the account, an authorized individual (parent, guardian, or power of attorney) can do so on their behalf.
Only one ABLE account is allowed per individual nationwide.
State-Specific ABLE Rules
ABLE accounts are offered at the state level, so rules, fees, and investment options vary by state.
You do not have to open an account in your home state—you can choose a program in another state with better terms.
Some states may offer state income tax deductions for contributions.
Medicaid Payback: The Final Insult
When you die, Medicaid can swoop in to claim whatever’s left in your ABLE account to reimburse themselves for services they provided you. Funeral costs get covered first—so at least you won’t be a burden in death, right?
But let’s call it what it is: The only savings you're allowed to have which will be immediately surrendered to the state upon your death. Die with small children? No inheritance to provide for their care or college. Leave a spouse behind, they're on their own even if they contributed financially to your ABLE account. Adding money to the account of your disabled child to help provide for their care? It's gone when they're gone.
ABLE Account: Because you're Always Broke until Life Extinguished.
Why ABLE Accounts Are a Tool, Not a Solution
ABLE accounts are pitched as a way for disabled individuals to save money without losing benefits. And sure, they’re better than nothing. But let’s be real:
Contribution limits are laughably low.
Excessive rules and restrictions make it easy to mess up and be hit with huge penalties you can't afford.
Medicaid can swoop in after you die to take what’s left.
The result? A complex, underwhelming solution to a problem that shouldn’t exist. Disabled people shouldn’t have to navigate a financial obstacle course just to save for the future. If the government really wanted to help, they’d fix the broken system instead of throwing out half-baked ideas like ABLE accounts.
Because at the end of the day, these accounts are like a Band-Aid on a broken leg: better than nothing, but nowhere close to what’s needed.
ABLE Accounts: Allowed, But Less Equitable
Want more information? “The ABLE Employment Flexibility Act of 2024: Republican State Sanctioned Discrimination for Disabled Workers?” comes out on January 6th. Subscribe now and find out why it’s a terrible idea.
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Just a left handed girl in a right handed world trying to figure out
“What the Fork🍴?!?” is going on ~ 🤯 Cheryl.wTf 🍴
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