In recent discussions, financial experts have highlighted a potentially transformative opportunity for disabled veterans and their families to save and invest tax-free through ABLE accounts. These accounts are specifically designed to assist individuals with disabilities in managing expenses related to their care without jeopardizing their eligibility for other benefits. Currently, approximately one million veterans meet the criteria for these accounts, but starting in 2026, this number is expected to expand significantly due to changes in age restrictions. Navy veteran Kevin Matthews emphasized the importance of understanding and utilizing these accounts during a webinar hosted by the Military Officers Association of America.

The foundation of ABLE accounts lies in their ability to provide a tax-efficient method for saving and investing funds earmarked for disability-related expenses. As of now, eligibility hinges on the onset of disability before the age of 26, encompassing not only veterans but also military families caring for children with special needs. Starting January 1, 2026, the age limit will increase to 46, broadening the scope of potential beneficiaries. For those receiving need-based assistance like Supplemental Security Income (SSI), up to $100,000 in an ABLE account does not affect their qualification for such benefits.

ABLE accounts offer versatility, accommodating savings, checking, and investment options. They are administered by individual states, similar to 529 college savings plans. Account holders can choose any state's plan based on cost and features, although selecting one from their home state might offer additional perks such as state tax deductions. The annual contribution cap stands at $19,000, with working adults who do not participate in employer-sponsored retirement plans eligible for an extra $15,060 contribution ($18,810 in Alaska and $17,310 in Hawaii).

These funds can be utilized for qualified disability expenses that enhance the health, independence, and quality of life of the account owner. Such expenses span categories including education, housing, transportation, employment training, assistive technology, personal support services, health, financial management, legal fees, and basic living expenses. Despite the program's merits, some critics argue that the annual contribution limit should be higher to better accommodate the extensive care needs covered under the program.

Moving forward, it is crucial for disabled veterans and their families to explore the potential of ABLE accounts as a means of securing financial stability while maintaining access to essential benefits. With upcoming changes set to expand eligibility, staying informed about the nuances of these accounts could prove invaluable. As the landscape evolves, leveraging ABLE accounts may become an integral part of long-term financial planning for many within the military community.