Newly expanded ABLE accounts create 'powerful retirement' tool for millions of disabled Americans

Core Insights - The ABLE accounts, established by the ABLE Act of 2014, allow individuals with disabilities to save and invest without losing eligibility for benefits like SSDI, SSI, and Medicaid [1][3] - Recent changes have expanded eligibility for ABLE accounts to 14 million Americans, up from 8 million, by raising the age limit for disability diagnosis from 26 to 46 [5][6] Summary by Sections Account Features - The average ABLE account balance at Vestwell is approximately $13,000, with some accounts exceeding $300,000 [2] - Investment options include an all-equity fund and an all-cash savings option, with the cash option being the most popular [2] - ABLE accounts allow tax-free investment growth and withdrawals for qualified expenses, which are not counted as income for means-tested benefits [7] Eligibility and Rules - To qualify for an ABLE account, individuals must have a disability or blindness lasting at least a year and diagnosed before age 46 [11] - There are no income limits for having an ABLE account, and only one account is allowed per person [12][13] - The annual contribution limit for ABLE accounts is set at $20,000, with additional contributions allowed for account holders who are employed [14] Qualified Expenses - Funds from ABLE accounts can be used for a variety of qualified disability expenses, including living costs, healthcare, education, and assistive technology [15] - Withdrawals for nonqualified expenses may incur taxes and penalties [16] Barriers and Challenges - Awareness of eligibility and account features remains low, with many potential users unsure if they qualify [10] - Some states have different features and limitations for ABLE accounts, and not all states offer these accounts [9][19] - The online-only nature of account opening can be a barrier for individuals without internet access [20] Impact and Future Outlook - The expansion of eligibility for ABLE accounts is seen as a significant advancement for financial wellness among individuals with disabilities [19] - The potential for increased financial flexibility and security through ABLE accounts is highlighted by users who have experienced financial challenges due to disabilities [23]