A tax-free Achieving a Better Life Experience (ABLE) account lets people with disabilities save for their future. It also lets family and friends give them money.

If you have a qualifying disability that began before you turned 26, you can save up to $14,000 each year in an ABLE account without affecting Medicaid, Supplemental Security Income (SSI), and most other benefits, as long as you meet all the other benefits rules.

An ABLE account lets you:

  • Build up savings without affecting your benefits: Up to $100,000 in your ABLE account won’t affect your SSI benefits. And no matter how much you have in your ABLE account, the money in it won’t affect Medicaid, Freedom to Work, FIP, Food Assistance Program (SNAP), and most other programs with a resource limit.
  • Get money from family and friends without affecting your benefits: Whether you earn the money yourself or it’s a gift from others, up to $14,000 each year can be added to your ABLE account without any changes in your SSI or other benefits.
  • Spend the money saved in your ABLE account on many types of daily expenses, not just medical costs: There are rules about how to spend the money, but there’s also a lot of flexibility.
  • Enjoy tax advantages: The interest earned on an ABLE account isn’t taxed, so your wealth will grow faster. However, when you take money out of the account, you have to spend it on qualified disability-related expenses, or it will be taxed as income.

ABLE programs are set up by each state. Michigan's ABLE account program is MiABLE.

When did ABLE start?

The federal Achieving a Better Life Experience Act was signed into law in December 2014. Ohio launched its STABLE program on June 1, 2016, the first ABLE program nationwide. Other states, like Nebraska and Tennessee, opened their own ABLE programs soon after that.

If you qualify, you can open an ABLE account in any state that has an ABLE program open to customers nationwide (you do not have to live in the state where you open an ABLE account). However, you can only open one ABLE account, so you need to decide which state offers the ABLE program that works best for you. The good news is that you can switch your ABLE account from one state program to another. You do not have to stick with the first state program you choose.

An ABLE account can be set up in addition to a Special Needs Trust, but an ABLE account costs less to set up and gives you more choice and control. Individuals with disabilities and their families may choose to have both an ABLE account and a trust.

Note: After you die, money in your ABLE account will be used to pay back the Medicaid program for any benefits you got after you opened your account. If that could be an issue for your family, look into a third-party Special Needs Trust. Learn more about a Special Needs Trust.