Millions more Americans are now eligible to open this underused tax-free investment account in 2026. Who qualifies and how it works

That changes in 2026 with the age of eligibility rising to 46 years old, which will effectively turn a niche benefit into a mainstream financial tool.

A historic expansion of eligibility

In the new ABLE Age Adjustment Act, lawmakers recognized that many disabilities, such as those resulting from accidents, chronic illnesses or mental health conditions, occur later in adulthood. This adjustment is expected to increase the eligible population from approximately 8 million to 14 million Americans, according to the National Disability Institute (NDI) (2).

The core of an ABLE account is its status as a tax-advantaged savings and investment vehicle designed specifically for people with qualifying disabilities. These specialized accounts were created to address the unique financial needs of people with long-term disability who may be economically productive but can’t be independent with Supplemental Security Income (SSI) benefits alone.

Before the creation of the ABLE account, individuals with disabilities could not save more than $2,000 in assets without risking their eligibility for means-tested programs like SSI and Medicaid (3).

The expansion of eligibility also recognizes that some long-term disabilities develop after a person turns 26. As long as the onset of disability occurred before the cutoff age (now 46), an individual can open an account at any age.

Because disability-related costs can impact financial stability across the economic spectrum, the ability to save for future needs without tax friction is universally valuable. The 2026 expansion helps align the program’s rules with the reality that disability can happen at any stage of life. It will “allow older adults who became disabled through accidents, chronic illness or military service to build a better economic future for themselves and their families,” said NDI executive director Thomas Foley (2).

Tax-free growth meets benefit protection

ABLE accounts dual nature make them indispensable for people with disabilities because they function as both a tax shelter and a benefits shield. Like a Roth IRA, contributions to an ABLE account are made with after-tax dollars, meaning there is no immediate federal tax deduction. However, the money within the account grows tax-free, and withdrawals remain tax-free as long as they are used for qualified disability expenses (QDEs) (4).

Another super power of ABLE accounts is the broad number of “qualified expenses” given by the IRS. QDEs can cover expenses related to the beneficiary's health, independence and quality of life including obvious costs like health care and prevention but also housing, transportation, education, employment training and assistive technology.

This flexibility distinguishes ABLE accounts from retirement-only vehicles like 401(k)s. While a retirement account is designed for the distant future, an ABLE account can fund the "real life" costs of today like rent or a vehicle modification while still offering long-term investment growth.

Despite the clear advantages of an ABLE account to those who qualify, adoption has been slow, however, possibly due to confusion over income limits. Less than 225,000 people have accounts, the Wall Street Journal reports citing ISS Market Intelligence data (5). Many families may assume these accounts are strictly for low-income households.

Crucially, the Social Security Administration (SSA) disregards the first $100,000 in an ABLE account when determining SSI eligibility (6). If the balance exceeds this amount, SSI cash payments are suspended but not terminated, and Medicaid eligibility usually remains intact.