Opening an ABLE Account

You can only open an ABLE account if your disability began before you turned 26 and meets the Social Security Administration’s (SSA) standards. (SSA has different disability standards for children, for adults, and for blindness.)

If you meet these rules, an ABLE account is easy and inexpensive to set up, and you don’t have to use a lawyer or other advisor.

The ABLE account is in your name, with you listed as the owner of the account (also called the designated beneficiary). You can open your own ABLE account or, if needed, a parent, a legal guardian, or someone with a valid power of attorney can open it for you.

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

States post their ABLE program details online, which generally includes how to apply or enroll online. Usually, you do not need to live in a particular state to open an ABLE account there.

You need to deposit a minimum amount to open an account, typically $25 – $50 (but it varies by state). You may also have to pay fees for maintaining an account or other services.

Each state offers several different investment strategies, including mutual fund accounts and federally insured savings accounts. An ABLE program might offer anywhere from 4 – 15 or more different options. It might help to get financial advice from an accountant, financial planner, or other professional as you compare different state ABLE programs, so you can pick the one that works best for you.

How Do I Choose an ABLE Program?

If you qualify for an ABLE account, you can open one in any state that offers accounts nationwide — it’s your choice. Each state has the option to offer its ABLE program nationwide or only to state residents, so you need to check which states let you open an ABLE account.

You are only allowed one ABLE account, so you need to compare the different programs and decide which state offers the account that is best for you.

But don’t worry; you don’t have to stay with the first state program you choose. You can switch your ABLE account from one state to another. You may have to pay minor fees to transfer your money. And you can change your investment strategy within the same state program up to two times each year.

The ABLE National Resource Center lists details about each state’s ABLE program.

Here are some things to think about when comparing state ABLE programs:

• What is the minimum amount needed to open an ABLE account, and is there a fee for opening an account? Are there any monthly or annual fees?
• How easy is it to put money into the account and take money out for qualifying expenses? For example, can you get money by electronic transfer or do you get a paper check? How long does this take? Does the account come with a prepaid debit card that you can use anywhere, at any time? Are there any extra fees for having a debit card?
• How good is the customer support? Try calling or emailing the program to see whether it’s easy to get someone to respond, and if that person seems helpful.
• Do the investment options meet your needs? Each state offers multiple investment choices, like mutual funds or savings accounts. Some investments may offer better returns than others, but may come with a greater risk, and the amount in your account can drop when the stock market drops. (Under the federal ABLE rules, you can change your investment options twice in a calendar year.)
• Are there any extra benefits for people living in your state? Some states give extra tax benefits for residents of that state. If you live in Colorado and have your ABLE account with Colorado ABLE, you may get a state tax deduction for any contributions you make.
• What is the most you can put into the account and still make deposits? Each state has a contribution limit at which they stop letting you make deposits. This limit ranges from $200,000 – $500,000 or more, depending on the state. For the Colorado ABLE program, the contribution limit is $500,000. (You don't need to worry about this until your account gets close to this level.)