Workers with disabilities may miss out on savings

Employment has been rising over the past few years for a growing group of Americans: people with disabilities.

Yet millions of workers are leaving money on the table, experts say, because they are unaware of a key financial resource designed for people with disabilities, known as Achieving a Better Life Experience, or ABLE, accounts.

These tax-advantaged accounts can be opened by an individual who is disabled or their authorized representative — for example, a parent, legal guardian, or agent named in their power of attorney. A child or adult with disabilities can save up to $100,000 in an ABLE account without losing eligibility for needs-based programs, such as Medicaid or Supplemental Security Income.

ABLE account distributions are tax-free when used for qualifying disability-related expenses. Those can include housing, education, transportation and assistive technology, among others, according to the IRS.

“Roughly 2% of employees in the United States understand what an ABLE account is, which is such an important vehicle to be able to provide savings without jeopardizing government benefits,” said Voya Financial CEO Heather Lavallee, citing recent research from the financial firm. 

More than 1 in 4 — over 70 million — U.S. adults live with a disability, according to 2022 data from the Centers for Disease Control and Prevention.

“If you think about the special needs community, it’s the only minority group that anybody can join at any point in time,” Lavallee said in a recent CNBC interview. 

The percentage of Americans with disabilities in the labor force reached an all-time high of 42.5% in November, and was at 41.1% in April, according to a recent analysis by the Kessler Foundation, a nonprofit organization focused on disability rehabilitation research.

Sena Pottackal, a 36-year-old public relations consultant with multiple disabilities, including blindness, told CNBC that she didn’t think she qualified for an ABLE account at first.

“I was 27, and I was told that it was a savings account specifically for people who were 26 or younger,” she said. 

However, ABLE account eligibility is based on the age of the onset of the disability, not the person’s current age. 

Starting Jan. 1, the age limit for eligibility increased from 26 years old to 46. 

“If they’ve acquired their disability at 46 or younger, they’re eligible, putting this back on my radar,” Pottackal said. “This could be a very valuable way for me to save for the future and develop financial and economic stability.”

Under the age expansion, about 14 million people are now eligible for ABLE accounts, according to data compiled by ISS Market Intelligence researcher Paul Curley. Yet as of April 30 only 1.7% of them had opened one, he found.

Individuals with disabilities have an opportunity to amass significant savings in these accounts, experts say. The first $100,000 in an ABLE account is generally excluded from the $2,000 resource limit to receive SSI benefits, unlike funds in a 401(k) or IRA. SSI is a federal program providing monthly benefits to adults and children who are blind, have a disability or are age 65 and older, and who have limited income and financial resources.

“If they’re contributing to their 401(k), they might jeopardize some kind of benefits,” Lavallee said. Putting the money into an ABLE program “can be another great way to be able to drive that savings.”

ABLE accounts are state-run, like 529 college savings plans, and you can open an ABLE account online through your home state or another state’s ABLE program website.

In 2026, the maximum contribution to an ABLE account is $20,000. Contributions may be eligible for a tax credit of up to $1,050 this year.

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