Effective January 1, 2026, the Achieving a Better Life Experience (ABLE) Act expanded eligibility for tax-advantaged savings accounts by raising the disability onset age threshold from 26 to 46. This change opens the door for an estimated six million additional Americans, including a significant number of veterans with service-connected disabilities.
Juliana Crist, senior vice president of ABLE programs at Vestwell, told InvestLin that the adjustment addresses a long-standing gap. "The original ABLE Act limited eligibility to individuals whose disability began before age 26," she said. "That excluded a large cohort of veterans and others whose disabilities were not present until later in life. Many service members enlist in their late teens or early twenties, serve for a decade or more, and sustain injuries or develop conditions well into their thirties. Under the old rules, they were simply shut out."
According to the Department of Veterans Affairs, approximately 5.5 million veterans live with service-connected disabilities. Crist noted that a substantial portion of that population now qualifies for ABLE accounts for the first time. "These are people who have already navigated enormous challenges and who deserve access to a financial tool that can genuinely help them build stability," she said.
Despite the expansion, awareness remains low. "Many veterans may not realize they qualify for ABLE accounts because they don't think of themselves as having a 'disability' in the traditional sense," Crist said. Conditions such as PTSD, traumatic brain injury, chronic pain, and hearing loss can meet eligibility requirements, even if the veteran does not receive Social Security benefits.
ABLE accounts offer several features that advisors can highlight: tax-free growth, tax-free withdrawals for qualified disability expenses, and the ability for friends and family to contribute. Assets in ABLE accounts do not count against means-tested benefit programs like Medicaid or Supplemental Security Income. "That's a combination that's difficult to find elsewhere," Crist said.
Contribution limits for 2026 are generous. Individuals can contribute up to $20,000 annually. Working veterans not enrolled in an employer-sponsored retirement plan may contribute an additional $15,650, bringing the total potential contribution to $35,650 per year. "For veterans who have spent years keeping their savings low just to stay under program asset limits, that's a significant and liberating shift," Crist said.
Crist described ABLE accounts as filling a structural gap in financial plans. "Think of them as filling a gap between a retirement account, which you can't touch without penalty, and a checking account, which offers no tax advantage," she said. For clients managing ongoing medical costs, housing needs, or employment transitions, that middle ground is valuable. ABLE plans now also offer target-date funds as investment options, catering to long-term savers.
Advisors should be aware that ABLE eligibility is tied to the Social Security Administration's definition of disability, not the VA's rating system. Veterans do not need to be receiving SSA benefits to qualify. Crist urged advisors to proactively discuss the option with veteran clients, as many may not self-identify as having a disability. For more on retirement planning trends, see Vanguard Research: Retirees Need Income Strategy, Not Just Savings Target and Corebridge Survey: 56% of Retirees Fear Outliving Savings More Than Dying with Money Left Over.
