The recently passed “Big Beautiful Bill” includes changes to ABLE account holders.
The Achieving a Better Life Experience (ABLE) Act was established in 2014 to provide qualifying special needs benefit recipients a means of saving up to $100,000 for their futures without threatening Supplemental Security Income.
Some of the rules legislating the use of ABLE accounts were set to expire at the end of 2025, but these provisions have now been made permanent. For example, ABLE accounts can now be used when employees don’t already participate in an employer-sponsored retirement plan.
In addition, ABLE accounts can now be established with rollovers from 529 college savings plans, so care-givers who established their 529 plans before learning that their loved-one was in need of special assistance, can now roll these dollars into an ABLE account.
The current changes also ensure eligibility to the “Savers Credit,” which will be important in the future as this credit will be replaced by the “Saver’s Match” in 2027.
With the “Saver’s Match,” the federal government will provide a matching contribution of 50% for eligible savers.
Perhaps the most important upcoming change for ABLE account holders and applicants is the lifting of the age restriction for eligibility.
Coming in January, rather than being limited to those whose circumstance was established before the age of 26, the ceiling will be lifted to the age of 46, which is predicted to dramatically increase ABLE program participation.
The ABLE program has been growing dramatically since its establishment including a record year in 2024 according to the National Association of State Treasurers, with the highest year-over-year increase in new accounts and assets.
For more information on this change see this fact sheet provided by the ABLE National Resource Center: https://www.ablenrc.org/the-able-age-adjustment-act-fact-sheet/.
