ABLE Accounts

The Basics

A tax-free Achieving a Better Life Experience (ABLE) account lets people with disabilities save for their future without affecting their benefits. It also lets family and friends give them money.

If you have a disability that meets Social Security’s standards (there are separate disability standards for children or youth, for adults, and for blindness) and your disability began before you turned 26, you may be able to save up to $28,880 each year in an ABLE account without affecting Health First Colorado (Medicaid), Supplemental Security Income (SSI), and most other benefits, as long as you meet all the other benefits rules.

Of that $28,880 per year, up to $16,000 can come from any source, including your family, friends, benefits, or other unearned income. If you have a job, you can save up to another $12,880, which can only come from your own earned income.

An ABLE account lets you:

ABLE programs are set up by each state. Colorado's ABLE account program is Colorado ABLE.

If you qualify, you can open an ABLE account in any state that has an ABLE program open to customers nationwide (you do not have to live in the state where you open an ABLE account). However, you can only open one ABLE account, so you need to decide which state offers the ABLE program that works best for you. The good news is that you can switch your ABLE account from one state program to another. You do not have to stick with the first state program you choose. Learn more about why you may want to open an ABLE account.

ABLE accounts and Special Needs Trusts

An ABLE account can be set up in addition to a Special Needs Trust, but an ABLE account costs less to set up and gives you more choice and control. For example, money in a Special Needs Trust cannot be used for housing or basic living expenses like food and clothing, but you can use money in an ABLE account to pay for these. Individuals with disabilities and their families may choose to have both an ABLE account and a trust.

Note: After you die, money in your ABLE account will be used to pay back the Health First Colorado (Medicaid) program for any benefits you got after you opened the ABLE account. If that could be an issue for your family, look into a third-party Special Needs Trust. Learn more about Special Needs Trusts.

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