Expanded ABLE Account Eligibility Could Provide New Source of Retirement Income

ABLE—Achieving a Better Life Experience—accounts saw a huge expansion of eligibility on January 1, as the state-run savings vehicle became available to people with disabilities that began before age 46, up from the original cut-off age of 26. This provision of the SECURE 2.0 Act of 2022 brings the total number of people eligible for the program from about 8 million to an estimated 15 million, according to Paul Curley, executive director at ISS Market Intelligence (ISS STOXX, which owns PLANADVISER, also owns ISS Market Intelligence).

As a result, common perception of ABLE accounts is likely to change to that of a savings plan available to segments of the adult population, including disabled veterans and adults with invisible disabilities like mental and neurological conditions, rather than accounts set up only for children with disabilities.

Tax Advantages

Given research from the Employee Benefit Research Institute showing that people with disabilities need more money to match nondisabled people’s standards of living, ABLE accounts were originally intended for individuals to save and take tax-free distributions for basic living and qualifying disability-related expenses. Currently, account owners can save up to $100,000 without impacting their Supplemental Security Income or Medicaid benefits.

People with disabilities also face higher retirement costs, so ABLE accounts can also be used for long-term savings, much like health savings accounts or special needs trusts. The 2026 yearly contribution limit for ABLE accounts is $20,000, and contributions can qualify for the IRS Saver’s Credit. Individuals who do not participate in an employer-sponsored retirement plan can deposit an additional $15,650 or total wages earned, whichever is less.

“Wealthier people have qualifying conditions—their children, their loved ones, their spouses could have qualifying conditions,” says Juliana Crist, senior vice president of ABLE investment programs at Vestwell. “If you’re an adviser, you should be mentioning ABLE accounts to every single person that walks in your door.”

As of September 30, 2025, under the original eligibility, there were more than 223,000 ABLE accounts with more than $2.87 billion in total assets, according to ISS Market Intelligence. Total assets increased by $565 million in the first three quarters of 2025, compared with an increase of $565 million in all of 2024 and $487 million in 2023.

The maximum holdings in an ABLE plan ranged from $235,000 to nearly $600,000 last year, depending on the state program, although account owners with more than $100,000 may see fewer public benefits. Rollovers are allowed from 529 plans and other ABLE accounts, and recent IRS guidance stated that rollovers from Trump Accounts will be allowed in the calendar year in which account owners turn 17.

Vestwell administers 19 state-run ABLE plans, and Crist says 67% of accounts had no withdrawals in the last year—signaling a broad interest in saving.

“It’s almost like the marriage of a Roth and an emergency savings account,” Crist says. “You can use it for long-term retirement, 30 or 40 years in the future, but if you have to go to the doctor, you can also take the money out tomorrow with no penalty, tax-free.”

State-Run Plans

Although 46 states and the District of Columbia offer ABLE accounts, only 25 states’ programs are open to out-of-state residents, including Virginia’s ABLEAmerica program—the only program sold exclusively by financial advisers. All other ABLE plans cannot be sold by advisers, but advisers who are compensated for advisory roles can potentially discuss state plans with clients as a savings opportunity.

State-run plans typically have a designated registered investment adviser to recommend investments for the plan’s portfolio options. ABLE account owners can discuss their individual investment choices with a financial adviser with whom they have a fiduciary relationship.

“If RIAs have any questions about the applicability of fiduciary duties to their individual situation, they should consult with counsel,” says Mark Chapleau, founder of the Chapleau Law Group LLC, which specializes in legal issues related to 529 and ABLE plans.

ABLE program administration is dominated by two providers: Ascensus, which administers 24 states’ plans, and Vestwell, which administers 19 states’ plans. Crist says Vestwell will introduce target-date funds to ABLE plans in mid-2026 to simplify the current “risk-based” allotments and that the company aims to make ABLE plan selection more streamlined.

“We would love to get to a state where our 401(k) platform has these add-ons that people can select from in the interface: Here’s your 401(k), ABLE account, emergency savings account,” Crist says. “Make that decisionmaking process easy.”

Andrea Feirstein, the CEO and managing director of AKF Consulting, works on state-run investment programs and says she hopes to see more financial advisers involved in ABLE plans. Citing ISS Market Intelligence stats from September 30, 2025, Feirstein notes that Virginia’s ABLEAmerica plan—sold only by advisers—had about 4,300 accounts with an average account size of $20,812. That is more than twice the average of Virginia’s ABLENow program, which is sold directly to investors and had about 21,000 accounts with an average size of $9,667 on September 30. Virginia’s ABLEAmerica account average also outpaced the national account average of $12,863 as of September 30.

“That’s the impact of the adviser,” Feirstein says. “You’ve got financial professionals who are talking to families. Only 4,300 accounts, but they’re saving … more than twice what the direct accounts are showing you.”

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