This autumn, PocketSmith and ABLE administrators from across the country had the opportunity to work with Semper Fi & America’s Fund on a webinar series for disabled veterans. In this series, we talked about expanded ABLE account eligibility for disabled veterans who are still in the employment market, those who are not, and those who may have disabled dependents.
It was an honor and privilege to extend this knowledge to a community who have dedicated their lives to service. This Veterans Day, we want to bring the good news to all those who may have served.
As of January 1, 2026, somewhere between one and two million veterans became newly eligible for ABLE accounts. The ABLE Age Adjustment Act — which passed into law in late 2022 — caused this change in eligibility standards.
Previously, to qualify for an ABLE account, your disability must have had an onset date prior to your 26th birthday. It didn’t matter if you were 28 or 52 — your age at the time of account opening didn’t matter. What mattered was when the disability started.
“Under the age of 26” is an extremely limiting barrier. Many disabilities don’t onset until midlife or later. Incurring a disability in the line of service often happens after one’s 26th birthday, which meant that many disabled veterans did not qualify for this lifeline of an account.
When the ABLE Age Adjustment Act changes kicked in earlier this year, the age of onset bumped up to prior to age 46. This nearly doubled the number of eligible Americans generally, and significantly improved the situation for America’s military members who live with disabilities.
You don’t have to be a veteran to qualify for an ABLE account. But this change allowed over a million veterans to newly qualify.
An ABLE account is a tax-exempt savings and investment account that shelters your assets from resource tests across a number of different programs. If you receive means-tested government benefits — whether they’re related to the VA or not — this asset-test protection can maintain your eligibility for benefits while still allowing you to build financial security.
Using an ABLE account does not interfere with the benefits you sacrificed so much to earn. It’s meant to supplement those benefits — not replace them.
If you have a Veterans Pension, your net worth is means-tested. The money in an ABLE account does not count towards this resource test, allowing you to build savings without impacting your benefits.
Veterans who utilize non-military programs such as Medicaid can also benefit from this asset protection.
If you receive disability pay in relation to a disability you incurred in the course of service, the benefits tied to your military disability rating are not means-tested. But there are still other advantages an ABLE account can provide.
The money you invest in an ABLE account is tax-exempt. This means that at the federal level, there are limited tax benefits at the time of contribution. Some veterans may be able to count their contributions towards the Savers Match Credit on their 1040, but these instances will be limited.
The biggest tax advantage is that when you withdraw the money, you will not have to pay taxes on the distribution or any growth.
Some states do provide front-end state tax benefits. Pennsylvania and Mississippi are the most generous, offering a dollar-for-dollar state tax deduction for all contributions to an ABLE account throughout the year. Whatever your state’s tax laws are surrounding ABLE, they’re worth researching. Two great resources to help you get started are the ABLE National Resource Center and ABLE Today.
Qualifying for an ABLE account has nothing to do with your disability rating from the military or VA. You do not need a 100% disability rating to qualify — in fact, you can qualify without a disability rating from either of these entities.
Instead, what matters is whether or not you meet the medical definition of disability from the Social Security Administration (SSA). The SSA administers benefits like SSI and SSDI, so they do also list financial requirements. But you don’t need to be on SSI or SSDI to qualify for an ABLE account, so those financial requirements are not a factor for ABLE eligibility.
It’s just the SSA medical definition you’re concerned with. Disabilities under this definition are not limited to physical disabilities. Mental health disabilities — such as post-traumatic stress — can also qualify you for an ABLE account.
Note: You may be a veteran who is on SSDI. In this instance, the financial requirements would apply to SSDI, but not your ABLE account.
Opening an ABLE account is as simple as visiting the state’s ABLE website. If your state doesn’t offer an ABLE account, some states do allow you to open an account across state lines.
This isn’t like other disability programs you’ve encountered — it won’t take months of paperwork and new certifications. In many cases, you can open your account online from the comfort of your own home in as little as 5-10 minutes.
Technically, the IRS requires you to keep some type of paperwork documenting your disability on hand. Some states require you to confirm you have this paperwork in your own personal files.
Documentation from the military or VA assessing your disability is often sufficient — you don’t typically need to seek new paperwork. But if you so wish, you can get a letter from your doctor certifying you meet those SSA medical requirements. You can find a template for this purpose here.
In 2026, the maximum amount you can contribute to an ABLE account is $20,000. Other people can contribute to your ABLE account, too. The contribution limit includes all dollars contributed to your account throughout the year — whether those dollars came from you, a friend or family member.
The annual contribution limit changes each year in relative tandem with the gift tax exclusion amount. This means that in future years, it is likely to go up.
The total amount your account can hold in savings and investments at any given time varies by state. Most states allow for somewhere between $500,000 to $600,000, but there are exceptions. Some states allow you to hold more in your ABLE account, while others allow you to hold far less.
Tip: Are you employed? If so, you may be able to contribute even more through the ABLE to Work program.
Spending money from your ABLE account is easy. You can make a withdrawal at any time — you do not need to wait for a specific retirement age. While you can make long-term investments, you are also allowed to use the money for your needs in the here and now.
The caveat is that you have to use the money for ‘qualified disability expenses.’ That said, the list of qualified disability expenses is quite broad. It’s not restricted to only medical appointments or adaptive equipment.
Because you can’t separate your disability from your personhood, nearly anything that would better your life counts as a qualified disability expense. This can include things like groceries, housing expenses and even “fun” line items in your budget.
You will want to read your state disclosure documentation to double-check the fine print on the rules, but the biggest thing to avoid is using the money to gift something to someone else.
Whether you need an ABLE account to build savings while continuing to receive your VA Pension, or don’t need to protect your assets but want another tool to work towards FIRE, an ABLE account can help you build better financial health and security.
And in 2026, ABLE accounts are finally available for a larger portion of people who have served.
Brynne Conroy is an award-winning personal finance writer, creator of the popular women’s finance site, Femme Frugality, and author of The Feminist Financial Handbook, which was an Amazon #1 New Release across multiple categories including Poverty and LGBTQ Demographic Studies. Her work has been cited in academic texts, and she’s spoken at venues such as Vanderbilt University, the Financial Planning Association and the 529 Conference. Here at PocketSmith, Brynne covers personal finance within American financial systems.
