An ABLE account is a tax-advantaged savings and investment account for individuals with disabilities that allows them to save money without losing eligibility for benefits like SSI or Medicaid. In Michigan, ABLE accounts are offered through the MiABLE program, and funds can be used for housing, education, transportation, healthcare, and other qualified expenses. ABLE accounts can be very powerful financial planning tools for families with a child or adult with a disability, but they are not the right solution for every situation.
What Is an ABLE Account?
An ABLE account stands for Achieving a Better Life Experience account. These accounts were created under federal law to allow individuals with disabilities to save and invest money while still qualifying for government benefits.
Normally, individuals receiving Supplemental Security Income (SSI) or Medicaid cannot have more than $2,000 in assets. An ABLE account allows them to save much more than that without losing benefits.
In Michigan, ABLE accounts are administered through the MiABLE Program. These accounts function somewhat like a combination of a 529 college savings plan and a Roth IRA, but specifically for disability-related expenses.
Michigan ABLE Account Rules
Eligibility
- The individual must have a disability that began before age 26
- The individual must be eligible for SSI or SSDI, or
- Have a doctor’s certification of disability
Important: Starting in 2026, the age requirement increases from before age 26 to before age 46, which will allow many more people to qualify.
Contribution Limits
Up to $18,000 per year (2025–2026 limit, indexed for inflation) and can come from:
- Parents, Grandparents, The individual, Friends, Special needs trusts, and/or Employers
If the individual with the disability is working, they may be able to contribute additional money from earned income beyond the standard annual limit (subject to rules).
Account Balance Limits
In Michigan, accounts can grow to over $500,000. However, SSI benefits may pause if the ABLE account exceeds $100,000 Medicaid eligibility is typically not affected. This makes ABLE accounts very useful for long-term savings and investing.
What Can ABLE Account Money Be Used For?
ABLE account funds must be used for Qualified Disability Expenses (QDEs), which include:
- Housing
- Rent or mortgage
- Utilities
- Education
- Transportation
- Healthcare
- Assistive technology
- Therapy
- Job training
- Personal support services
- Legal fees
- Financial management
- Basic living expenses
The definition is intentionally broad, which makes ABLE accounts very flexible.
Advantages of ABLE Accounts
- Does Not Affect SSI or Medicaid (Up to Limits): This is the biggest advantage. Individuals can save and invest money without losing government benefits.
- Tax Advantages
- Contributions are after-tax
- Investments grow tax-free
- Withdrawals are tax-free if used for qualified disability expenses
- Family and Friends Can Contribute: Grandparents and relatives often like using ABLE accounts for gifts instead of giving money directly.
- Can Pay for Housing: This is very important because special needs trusts cannot typically pay for housing without reducing SSI, but ABLE accounts can.
- Encourages Independence: ABLE accounts allow individuals with disabilities to build savings, pay expenses, and maintain independence.
Disadvantages of ABLE Accounts
- Disability Must Have Started Before Age Requirement: Currently before age 26 (changing to 46 in 2026), which excludes some individuals.
- Contribution Limits: You cannot contribute unlimited amounts like you could with a special needs trust.
- Medicaid Payback Rule: When the beneficiary passes away, Medicaid may be able to recover expenses from the ABLE account in some situations.
- Investment Options Are Limited: ABLE accounts typically have a limited investment menu compared to brokerage accounts.
If you live in Grand Rapids or West Michigan, BeManaged Financial Services helps families evaluate ABLE accounts, special needs planning, and overall financial planning to determine what is best for your family.
You can learn more here:
Financial Planning → https://bemanaged.com/financial-planning
Individual Investors → https://bemanaged.com/individual-investors
Final Thoughts
ABLE accounts are one of the most important financial tools available for individuals with disabilities and their families. They allow families to save and invest money, pay for important expenses, and maintain eligibility for government benefits at the same time.
However, ABLE accounts work best when they are part of a larger financial planning strategy, especially when combined with special needs trusts, retirement planning, and estate planning.
Schedule a Fit Conversation
If you would like help deciding whether an ABLE account makes sense for your family, BeManaged Financial Services would be happy to help.
Schedule a fit conversation to see if we are a good fit for your financial planning needs.