Financial Tools That Can Help Americans with Disabilities
Individuals with disabilities rely on Supplemental Security Income (SSI), Medicaid, and other federal and state public benefits for much-needed financial support. However, retaining eligibility for these benefits depends on meeting a means or resource test. Individuals may have only $2,000 in countable assets, such as savings and retirement funds. This makes it difficult to establish financial independence and save for their future needs.
Fortunately, special needs trusts and ABLE accounts are financial tools that can help address this problem.
Special needs trusts
The primary purpose of a special needs (or supplemental) trust is to provide for the needs of a disabled person. To help keep income or net worth within the eligibility limits for government programs, assets can be placed in the trust, from which a trustee has the discretion to pay for supplementary care and other “amenities” that enhance the life of the beneficiary. Special needs trusts may be funded with the individual’s own funds or with assets from a third party (e.g., a parent or grandparent).
Receiving an inheritance directly from a retirement account such as a 401(k) or IRA can result in the loss of critical public benefits. However, a new type of trust called an applicable multi-beneficiary trust (AMBT) can be used when there are one or more designated beneficiaries, and at least one of them is disabled or chronically ill. If an AMBT is named as the account beneficiary, RMDs can be stretched over the lifetime of the disabled beneficiary, and the distributions can be retained in the trust, so they won’t impact government benefits.
Trusts incur up-front costs and often have ongoing administrative fees. The use of trusts involves a complex web of tax rules and regulations. Consider the counsel of experienced estate planning, legal, and tax professionals before implementing trust strategies.
ABLE accounts
ABLE (Achieving a Better Life Experience) accounts are tax-advantaged accounts that enable Americans with disabilities to save money for the future without potentially jeopardizing public benefits. (SSI benefits may be temporarily affected once an account reaches $100,000.) Any earnings on contributions are tax deferred at the federal level (and in some cases at the state level). Distributions will be tax-free if used to pay qualified expenses (e.g., housing costs, home improvement and modification, transportation, health care, education, employment training, assistive technology, and personal assistance, among others). Though no federal income tax deduction is available, some states offer tax incentives to residents.
1As of January 1, 2026, eligibility has expanded to include individuals whose disability began before age 46 (previously, the disability must have begun before age 26). This means that an estimated six million more Americans whose disabilities began later in life, including over one million veterans, may be eligible to open ABLE accounts. Individuals who are receiving SSI or Social Security Disability Insurance (SSDI) automatically qualify. Others may qualify if they meet Social Security’s definition of disability and are able to obtain certification from a physician. A family member who is legally authorized may be able to open and oversee an ABLE account on a qualified person’s behalf, but each eligible beneficiary can have only one ABLE account.
Growing number of ABLE accounts
Source: ABLE today, 2026
Contributions can’t exceed an annual limit, which is $20,000 in 2026. ABLE account owners who work and who don’t have an employer-sponsored retirement account may save an additional $15,650 from their earnings in 2026 ($17,990 in Hawaii and $19,550 in Alaska). Each state sets its own lifetime limit.
Participating in an ABLE account may involve investment risk, including the possible loss of principal, and there can be no assurance that any investing strategy will be successful. Carefully consider a portfolio’s level of risk, charges, and expenses before investing. Read the program’s official disclosure statement and applicable prospectuses, which contain this and other information about the investment options, underlying investments, and investment company. Consult a tax professional for more information. ABLE accounts may be protected from creditors if you invest in your own state’s program, depending on the state.
1) ABLE National Resource Center, 2026
This information is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek guidance from an independent tax or legal professional. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Broadridge Advisor Solutions. © 2026 Broadridge Financial Solutions, Inc.