What Advisers Should Know About ABLE

With a billion dollars in assets in ABLE accounts, and growing, advisers should pay closer attention to the program to financially support Americans with disabilities, Michael Parker, senior vice president at Vestwell, said on a webinar with clients Thursday.

“I talk with a lot of advisers about [ABLE] and we see there’s one big thing that parents with kids who have disabilities worry about, and that’s what’s going to happen when I’m gone,” Parker said. “Who’s going to take care of my child with a disability when he or she is 32 years old and I have passed on […] ABLE really is a game changer for these families.”

ABLE is a savings vehicle much like a 529 plan, where families can put away money for kids with disabilities, even adults with disabilities, he explained. The law allows them to put money away and not lose their federal benefits. Additionally, individuals with a disability working a part-time or full-time job can save more money if they have taxable income in an ABLE account.

“I tell advisers all the time, ‘look, just have a basic understanding of ABLE,’” Parker said. “Have a basic understanding of special needs trusts, Social Security benefits and basic federal regulations because they have been changing.”

He says an adviser can consider combining an ABLE account with a special needs trust, along with other vehicles such as life insurance. Advisers can then work with a family on retirement, or maybe they’re already working with a family on retirement and can introduce an ABLE account.

“We really tell a lot of advisers and other folks that we work with and even employers you might want to offer ABLE as a benefit just like 529s, just like Gradifi [a financial wellness program], just like retirement,” he said. “Offer this because you probably have workers with kids with disabilities, you just may not realize it.”

He also noted of the ABLE Age Adjustment Act coming around in 2026, when people will be able to take advantage of ABLE up to the disability starting prior to their 46th birthday, an increase from the current age threshold of 26. This can be especially beneficial for veterans who may have been injured while overseas.

Parker added that many advisers that he’s spoken to work with organizations that support people with disabilities and help manage the ABLE accounts for their clients.

“It’s a great way to actually provide value to a local organization that works to help people with disabilities,” he said. “Then you are engaging with these families, engaging with adults with disabilities and building relationships there in addition to helping them with retirement or with other saving vehicles that they might be looking at.”

The webinar, sponsored by Vestwell, also covered SECURE 2.0, HSAs, and emergency savings.