What Families Need to Know Before Opening an Account in 2026

Beginning January 1, 2026, a major expansion to the federal Achieving a Better Life Experience (ABLE) Act will significantly broaden eligibility for ABLE accounts. The age-of-onset requirement for disability will increase from 26 to 46, opening eligibility to millions of individuals with disabilities who were previously excluded, particularly adults with later-onset conditions such as multiple sclerosis, traumatic brain injury, mental health disorders, and other chronic or degenerative illnesses.¹

For families navigating public benefits, long-term care planning, and lifetime financial sustainability, this change represents both an opportunity and a planning strategy worth considering. While ABLE accounts can be powerful tools, they are most effective when coordinated thoughtfully with benefits, trusts, and broader financial strategies.

What Is Changing in 2026?

Under the previous law, an individual had to have had a disability with onset before age 26 to qualify for an ABLE account. Beginning January 1, 2026, that threshold is increased to age 46.¹

Importantly, the expansion does not require that the individual be under 46 when the account is opened. Rather, the individual’s disability must have begun prior to their 46th birthday. This distinction is especially meaningful for adults who acquire disabilities later in life and were previously locked out of ABLE planning altogether.

This change was enacted as part of the SECURE 2.0 Act of 2022 and represents one of the most significant updates to ABLE legislation since the program’s inception.²

Why ABLE Accounts Matter for Benefits Planning

ABLE accounts allow eligible individuals with disabilities to save and invest money in a tax-advantaged account without jeopardizing critical means-tested public benefits such as Supplemental Security Income (SSI) and Medicaid.³

Key features include:

Tax-advantaged growth: Contributions grow tax-free, and qualified withdrawals are not subject to federal income tax.³
Preservation of benefits: ABLE account balances of up to $100,000 are excluded from the SSI resource limit; Medicaid eligibility is not affected by account balances.⁴
Flexible use of funds: Qualified disability expenses (QDEs) include housing, education, transportation, health care, assistive technology, employment training, and other expenses that support quality of life.³

For many families, ABLE accounts serve as a flexible complement to special needs trusts, allowing individuals with disabilities to pay for everyday living expenses while maintaining benefit eligibility.

Who May Now Benefit From the Expansion?

The age expansion significantly broadens the ABLE landscape. Individuals who may newly qualify include those with:

Later-diagnosed developmental or intellectual disabilities
Mental health conditions with adult onset
Traumatic injuries resulting in permanent disability
Chronic illnesses or neurological conditions diagnosed in adulthood (including for Veterans)

For these individuals, ABLE accounts can provide a long-overdue planning tool that supports independence, dignity, and financial participation without disrupting essential public benefits.

Contribution Limits and Funding Considerations

While eligibility is expanding, contribution limits remain in place and must be carefully managed:

Annual contribution limit: $19.000 2025 and $20,000 in 2026.⁵
Additional earned income contributions: Certain working beneficiaries may contribute additional amounts under the ABLE to Work provision, subject to annual limits.³
Lifetime state caps: Each state sets a maximum account balance, often aligned with 529 plan limits.³

Exceeding these limits or mismanaging contributions can inadvertently create compliance issues, making coordination essential—particularly when multiple family members contribute to an account.

ABLE Accounts and Housing: A Critical Planning Detail

One of the most common—and costly—mistakes families make involves housing expenses. While housing is a qualified disability expense, the timing of ABLE withdrawals matters. If ABLE funds used for housing are not spent within the same calendar month they are withdrawn, the funds may count as a resource for SSI purposes.⁴

This nuance underscores why ABLE accounts should never be treated as “set it and forget it” solutions. Proper cash-flow planning and administrative oversight are critical to preserving benefits.

Coordinating ABLE Accounts With Trusts and Estate Planning

ABLE accounts are not replacements for special needs trusts; rather, they are most effective when used in tandem. Trusts can hold unlimited assets and offer creditor protection and long-term governance, while ABLE accounts provide flexibility for day-to-day expenses and direct beneficiary control.⁶

However, improper coordination, such as naming an ABLE account as a trust beneficiary without understanding Medicaid payback rules, can undermine long-term planning goals.⁴,⁶ Many Special Need Trusts are able to fund ABLE accounts directly, so should be reviewed with your trustee and/or legal advisor.

This is where integrated planning becomes essential.

Why Families Should Plan Now

The popular phrase, “There’s no time like the present” is particularly apt here; planning for your existing or new ABLE account should start as soon as possible. Confirming eligibility, evaluating funding strategies, aligning ABLE accounts with trusts and benefits, and educating the broader care network all take time.

At Sequoia Financial Group, our Special Needs Financial Planning (SNFP) team partners with families to design Built For You strategies that coordinate financial planning, public benefits, legal structures, and long-term care planning into one cohesive plan. We work collaboratively with attorneys, advocates, tax professionals, and family members to ensure every decision supports sustainable care and preserves essential benefits—today and for decades to come.

Final Thoughts

The ABLE age expansion represents meaningful progress in disability planning—but with expanded opportunity comes increased complexity. Families who approach ABLE accounts thoughtfully, with professional guidance, are better positioned to leverage these tools in ways that protect benefits, support independence, and enhance quality of life.

If your family may benefit from the new ABLE eligibility rules in 2026, now is the time to begin the conversation.

Sources

¹ Internal Revenue Service, ABLE Accounts: Achieving a Better Life Experience, https://www.irs.gov/credits-deductions/individuals/able-accounts

² U.S. Congress, SECURE 2.0 Act of 2022, https://www.congress.gov/bill/117th-congress/house-bill/2617

³ ABLE National Resource Center, What Is an ABLE Account?, https://www.ablenrc.org/what-is-able/

⁴ Social Security Administration, Understanding SSI and ABLE Accounts, https://www.ssa.gov/ssi/spotlights/spot-able.html

⁵ Internal Revenue Service, Annual Gift Tax Exclusion, https://www.irs.gov/businesses/small-businesses-self-employed/whats-new-estate-and-gift-tax

⁶ The Arc, ABLE Accounts and Special Needs Trusts, https://thearc.org/resource/able-accounts-and-special-needs-trusts/

The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

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