Understanding ABLE Accounts: A Key Financial Tool for Individuals with Disabilities
At Whitmire, we recommend ABLE accounts (Achieving a Better Life Experience) to many of the clients and families we support. One major reason: in high-cost areas like Seattle, rent is extremely expensive, and affordable housing is scarce. Waitlists for low-income housing can stretch for years, leaving many individuals with disabilities struggling to find safe and stable housing options.
Let’s take a closer look at how ABLE accounts work — and why they matter.
What is an ABLE Account?
An ABLE account is a tax-advantaged savings account for individuals with disabilities. It allows eligible individuals to save money without jeopardizing access to most federally funded, needs-based benefits like Medicaid and Supplemental Security Income (SSI).
To qualify, the individual’s disability must have begun before age 26. However, starting January 1, 2026, the age of onset will expand to before age 46.
Established under Section 529A of the IRS tax code, ABLE accounts are designed to help individuals and families manage the additional costs of living with a disability—offering flexibility, security, and financial independence.
ABLE funds can be used for a wide range of Qualified Disability Expenses (QDEs). Money in the account grows tax-free, and withdrawals are also tax-free when used for QDEs.
What Are Qualified Disability Expenses (QDEs)?
QDEs are expenses related to a disability that enhance the individual’s health, independence, and overall well-being. These include:
Healthcare costs (e.g., medical treatments, therapy)
Educational expenses (e.g., tuition, books)
Transportation (e.g., car modifications, public transit)
Housing-related expenses (e.g., rent, home modifications)
Personal support services (e.g., caregivers, drivers)
Assistive technology (e.g., communication devices)
These broad categories give individuals flexibility in using their ABLE funds for a wide variety of needs, helping individuals lead a more independent and fulfilling life.
How Can You Access Funds in an ABLE Account?
Accessing funds in an ABLE account is simple. Account holders or their authorized representatives can withdraw funds via a debit card, checkbook, or bank transfer. As long as the funds are used for QDEs, withdrawals are tax-free. However, if the funds are used for non-qualified expenses, the earnings may be subject to taxes and a 10% penalty on the earnings.
Contribution Limits
In 2025, the standard contribution limit for ABLE accounts remains $19,000 per year. The ABLE-to-Work Act also allows individuals to deposit wages into their ABLE accounts even beyond the $19,000 limit, as long as their employer does not contribute to a retirement account. Working individuals could contribute up to $34,560 in their ABLE account. This is a significant increase, enabling employed individuals with disabilities to save more for their future. The maximum amount for an ABLE account is $100,000.
Increased Costs for Households with Disabilities
Research from the National Disability Institute reveals that households with an adult with a disability face an average increase in living costs of 28%. Learn more here: Extra Costs of Living with a Disability.
How to Find an ABLE Account Program in Your State
ABLE accounts are available through state-specific programs, so it’s important to choose one that fits your needs. To find a program in your state, visit the ABLE account state directory. For more information, the Social Security Administration and the ABLE National Resource Center offer valuable resources and guidance on how ABLE accounts work.
How a Case Manager Can Help with ABLE Accounts
At Whitmire, we support individuals and families in setting up and using ABLE accounts as part of a coordinated plan for greater independence and financial stability.
We help clients understand eligibility, navigate the enrollment process, and align ABLE account use with other public benefits. Our team can also assist with budgeting, identifying qualified expenses, and tracking spending to avoid penalties.
For individuals who need additional support, Whitmire can serve as the Authorized Legal Representative (ALR) to help manage the account on their behalf—ensuring it’s used responsibly and effectively.
Start saving now!
ABLE accounts are an invaluable financial tool, offering a way to save for the future without losing access to government benefits. With the ability to use funds for QDEs, access easy withdrawals, and contribute more through the ABLE-to-Work provision, these accounts help individuals gain financial independence while managing the additional costs associated with living with a disability.