ABLE, Saving, Investing, and Disability Benefits Glossary
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A
529A Account 529A
The formal name for an ABLE account, based on the Internal Revenue Service (IRS) tax code, section 529 that was passed by Congress and signed into law.
ABLE Account Hierarchy
An IRS listing of who can open or manage an ABLE account or be designated to do so if an ABLE account owner needs support. It follows this specific order: someone chosen by the person, or someone with legal authority or an agent under the power of attorney, conservator or legal guardian; a spouse; a parent; a sibling; a grandparent; or a Social Security representative payee.
ABLE Age Adjustment Act
Approved legislation that expands ABLE eligibility to more Americans with disabilities. Effective January 1, 2026, this expansion includes people who have a disability that began before age 46 (previously the age of onset was before age 26). An ABLE account may be opened at any age.
ABLE Investment Manager
Manages or provides ABLE investment portfolios and savings options. Examples include BlackRock, Vanguard, Fidelity, Capital Group, Sallie Mae, Schwab and others.
ABLE National Resource Center ABLE NRC
The ABLE National Resource Center (ABLE NRC) provides all the ABLE information you need in one place. ABLE NRC shares reliable information about ABLE plans, including plan comparisons, best practices and strategies to increase savings for now and into the future. Our mission is to educate, promote and support the positive impact ABLE accounts can make on the lives of millions of Americans with disabilities and their families. We want to drive action to help people open and manage ABLE accounts as a tool to secure their financial future.
ABLE Plan Administrator
The state entity, office or person who sponsors the ABLE plan, selects vendors and ensures compliance with state and federal law. Examples: Comptroller of the State of New York (NYABLE), Commonwealth Savers (ABLE Now), California Treasurer (CalABLE) or Higher Education Boards such as CollegeInvest (COABLE).
ABLE Program Annual Statement
A yearly report showing contributions, earnings, withdrawals, and account balance.
ABLE Program Banking Institution
Provides online banking services, may provide debit card access and FDIC-insured options. Examples: BNY Mellon, Fifth Third Bank, Bank of the West, Chase Bank, and PNC Bank. Bangor Savings Bank offers in-person and/or online banking services for the Maine ABLE plan.
ABLE Program Manager
The Program Manager is the entity that manages and provides certain services to the program such as account set up, maintenance, record keeping and platform services. Examples include Ascensus, Vestwell, Orion Advisor Solutions (TX) and Maine State Treasurer’s Office. The program manager is selected by the state that established and maintains the ABLE program/plan.
ABLE Plan
A plan established by a state or territory to provide ABLE accounts. Each state can customize its ABLE program, including rules for opening accounts, account balance limits and investment options. Plans are intended to operate as a qualified ABLE program to be used only to save for qualified disability expenses. The terms ABLE program and ABLE plan are often used interchangeably. Some states simply refer to their plan name by the name of the state while others generate unique names for their plan. Refer to ABLE Program.
ABLE Program
The general term used for a state or national program that offers ABLE accounts, manages rules, investments and reporting. The qualified ABLE program encourages and assists individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life pursuant to the ABLE Act of 2014 and Section 529A of the U.S. Internal Revenue Code. The terms ABLE program and ABLE plan are often used interchangeably. Refer to ABLE Plan.
ABLE to Work
A rule (also referred to as a provision) that allows an ABLE account owner who works the opportunity to deposit extra money into their ABLE account above the annual limit if they do not have deposits made to an employer sponsored retirement account within the calendar year. The tax regulations describe a retirement plan for these purposes as a 401(k) or other defined contribution plan (within the meaning of section 414(i) of the Code), a 403(b) retirement plan or a 457(b) deferred compensation plan. The additional contribution amount for eligible employed account owners is subject to change annually.
Account Fees
Costs charged by the ABLE program for maintenance, investments, withdrawals, for paper statements, debit-card, or checks. All fees are identified in ABLE plan disclosure documents.
Account Owner
This is the eligible person who has a disability. In some plans, the account owner is called the designated beneficiary.
Achieving a Better Life Experience ABLE
Federal legislation to ease financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses including, but not limited to, education, food, housing, and transportation. The ABLE Act created a new option for individuals with disabilities and their families to save for the future while protecting eligibility for public benefits.
Agent
A person authorized to act on behalf of the account owner. Each state ABLE plan may require different forms and documentation to name an agent. An Agent may be given limited or specific permissions.
Aggregate Limit
The total contributions allowed from all donors/sources, including the account owner, during a specified period such as a calendar year.
Aggressive Risk
An investment option with high potential returns but higher chances of losing money.
Annual Contribution Limit
The maximum amount that can be added to an ABLE account in a year. This is subject to change annually.
Asset Allocation
How ABLE savings and investments are divided among different types of assets such as checking account, money market or investment options to manage risk and returns.
Asset Limit
Public benefit programs use this term to identify the amount of countable assets or resources an individual can have to be eligible. In 2026, an individual’s Supplemental Security Income (SSI) resource limit is $2,000. Up to $100,000 in an ABLE account is not counted toward the SSI resource limit. Medicaid plans often have a $2,000 resource limit for people who have a disability. Any amount of ABLE funds is not counted as a resource for Medicaid.
Authorized Legal Representative ALR
An ALR is the parent, grandparent, guardian or power of attorney authorized to open and manage an ABLE account if the account owner is under the age of 18 or does not have the capacity to open and manage their account. Each ABLE program describes its requirements for an ALR.
Authorized Legal Representative Entity
An entity may be a person or an organization or agency. In an entity-managed ABLE account, the individuals assigned by the control person who will open, manage and view the ABLE accounts under the entity’s authority.
Automated Clearing House ACH
A way to set up an electronic funds transfer (EFT) of direct deposits into an ABLE account or to pay for qualified disability expenses directly from an ABLE account. This may be set up for regularly occurring deposits and expenses.
B
Balance Limit
This is the overall cap of funds that can be saved in an ABLE account. The balance limit varies by ABLE plan. In 2026, the range is between $235,000-$596,925.
Basis Point BP
One basis point is equal to 0.01 percent on investment accounts. A basis point is used to explain changes in investment fund performance or expense ratios.
Beneficiary
This term may be used to identify the person with a disability who owns the ABLE account. The Social Security Administration and other public benefit programs also use the term beneficiary for individuals who receive SSA or other public benefits. An ABLE account owner is not required to receive a disability benefit. Refer to designated beneficiary and eligible individual.
Beneficiary Designation Form
A form used to name who will inherit the ABLE account after the account owner passes away. The funds may be subject to taxation if the beneficiary is not ABLE eligible.
Benefits Counselor
The informal name of a professional who helps people understand and manage disability benefits such as SSI, SSDI, Medicaid, Medicare, and/or other public benefits. Some may be Certified Community Work Incentive Coordinators (CWIC) or Credentialed Work Incentive Practitioner (CWIP) or Credentialed Community Partner Work Incentive Coordinators (CPWIC). Refer to WIPA.
BrokerCheck
A free tool created by the Financial Industry Regulatory Authority (FINRA) to research the background and experience of financial advisors and firms.
Budget Worksheet
A tool used to track income, expenses, and monthly savings, helping a person manage their money effectively. There are many types and formats of worksheets that can be used.
C
Compounding
Interest earned on investments. If the earned interest is kept in the account, that will also begin to earn interest.
Conservative Risk
An investment approach that focuses on protecting money, projecting lower potential investment growth and lower risk of loss.
Conservator
A person appointed by a court to manage financial affairs for someone who cannot do so on their own. The conservator must consider the best interest of the person when making decisions.
Contributions
Money added to the ABLE account by the beneficiary, or third parties such as family, friends, employers, a corporation, a 529 qualified tuition plan or a special needs or pooled trust. Deposits, gifts and donations are common terms used for contributions.
Control Person
In an entity or organization managed ABLE account, the individual who oversees the Organizational Representative Payee. Examples are Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), President or Vice President (VP).
D
Debit Card
A card used to make purchases at businesses with money from the ABLE account. One type of debit card may be pre-paid in which a specific amount is loaded onto the card to set spending limits for the pre-paid debit card user.
Designated Beneficiary
The person with a disability for whom the ABLE account is opened. This is the ABLE account owner. Refer to eligible individual and beneficiary.
Direct Deposit
When a paycheck, Social Security benefit or contribution is deposited directly into an ABLE account.
Disability Certification
A document completed and signed by a licensed doctor stating that a person has a severe disability and the disability onset was before age 46. A disability certification is required when the person with a disability has not received SSDI or SSI benefits from SSA prior to the age of 46 or when they do not have a documented condition on Social Security Administration’s compassionate allowance list.
Disclosure Document
A document (may also be referred to as a booklet) posted on the website of each ABLE plan that explains rules, fees, risks, and investment options of the account. Each plan disclosure document link is posted in the Select a State Program ABLE NRC comparison tool, or on the state ABLE plan website. Most, but not all, plan documents are also posted on the Municipal Securities Rulemaking Board’s (MSRB’s) Electronic Municipal Market Access (EMMA) website.
Distribution
A distribution is also called a withdrawal. It is money taken out of the ABLE account. Non-qualified disability expense withdrawals are subject to federal and state taxes and may be subject to a 10 percent tax penalty.
Diversification
Spreading money across different investments (like a checking account, money market, and investment options offered by the plan) to reduce risk.
Diversified Portfolio
A portfolio that includes several bundled investments to reduce overall risk.
Dollar Cost Averaging
An investing strategy where a set amount of money is deposited regularly into an investment account. This may reduce investment risks over time as new money is always available for new investments.
E
Earnings
The money received from employment, rental properties, disability or retirement benefits, pension, and/or investment growth. ABLE investment growth is not considered earned income and is not taxable when the ABLE funds are eventually spent on qualified disability expenses. ABLE withdrawals are not considered countable income for means-tested benefits.
Eligible Individual
This is a person who has a disability. This is the ABLE account owner. Refer to beneficiary and designated beneficiary. A person who has a significant disability that began before age 46.
Entity
A company or organization that is designated to act as an authority for one or more ABLE eligible individuals. Entity examples include power of attorney, guardian or conservator, SSA representative payee, for profit and non-profit agencies, and government agencies.
Entity Management
A streamlined system that allows entities/organizations to open or manage one or more ABLE accounts belonging to individuals who they support.
Excess Contributions
Money added to an ABLE account above the annual contribution limit. Excess contributions may need to be withdrawn and returned to the depositor, or the funds could affect benefits and be subject to taxation.
Expense Ratio
This percentage is used to cover the fund’s operating expenses, such as management fees, administrative costs, and marketing, which are automatically deducted from your investment returns. A lower expense ratio results in lower fees and more of your money being invested to grow over time.
F
Federal Deposit Insurance Corporation FDIC
An independent U.S. government agency that protects depositors by insuring deposits at member banks, ensuring financial stability and public confidence in the banking system.
FDIC Insured
A federal protection that guarantees that money of up to $250,000 per person, deposited into certain bank accounts, including money market accounts, to prevent loss of the funds if the bank fails. ABLE investments that are not FDIC insured have no bank, state, or federal guarantee and may lose value.
Federal Poverty Level FPL
The federal poverty level is also known as the “poverty line” and is the amount of annual income earned by a household, below which they would be eligible to receive certain benefits. FPL amounts are higher in Alaska and Hawaii. The Department of Health and Human Services determines poverty guidelines annually.
Fees
All ABLE accounts have fees which may be service-based that cover administrative costs or may be asset-based on investments. Fees may be found in the state plan disclosure document and the ABLE NRC comparison tools.
Free Application for Federal Student Aid FAFSA
The form to apply for federal student aid. ABLE funds are not a countable resource for FAFSA.
G
Goals
The financial or life objectives a person wants to achieve, such as paying for education, buying a home, paying for medical needs, and/or saving for retirement expenses.
Guardian
A person who is legally responsible for making personal, medical, or financial decisions for someone who cannot make those decisions independently. This role is documented in writing by the court.
H
(Department of) Housing and Urban Development HUD
The federal agency that oversees public housing and housing programs for low-income individuals, including those with disabilities. Services may include rental assistance, rental vouchers, housing and foreclosure prevention counseling, home purchase savings, and financing options. ABLE funds are not a countable resource for HUD.
I
Interested Party
A person who is authorized to receive information about the ABLE account but cannot control or make changes to it. An Agent may be granted this limited authority.
Internal Revenue Service IRS
The IRS plays a crucial role in the ABLE program by ensuring that the accounts meet the requirements of Section 529A of the Internal Revenue Code. This includes maintaining that the funds in the account are used for qualified disability expenses (QDEs) and that the account does not affect eligibility for federal assistance programs. The IRS also provides guidance on the tax benefits associated with ABLE accounts.
Investment Options
Choices for how money in an ABLE account can be invested. Options vary among state plans and may include a checking account, money market account, conservative, moderate or aggressive portfolios, each with various levels of risk.
Investment Portfolio
A collection of investments offered within the ABLE plan. The account owner chooses the portfolio that best addresses their risk tolerance and meets their needs.
Investor.gov
A website from the U.S. Securities and Exchange Commission (SEC) that provides education and guidance for investors.
M
Medicaid
A government program that provides health insurance and services for people with low income or disabilities. ABLE funds are not a countable resource for Medicaid eligibility.
Medicaid Payback
After an ABLE account owner passes away, outstanding qualified disability expenses including funeral and burial expenses are paid. Medicaid may then opt to request that remaining ABLE funds reimburse Medicaid for services provided since the date of opening an ABLE account. Some states have taken steps to limit Medicaid payback of ABLE funds. Other names commonly used interchangeably are Medicaid claw back or Medicaid recovery.
Medicare
A federal health insurance program for people ages 65 or older or those with disabilities who have paid into Medicare or are eligible based on a family member who had paid into Medicare while working. ABLE funds are not a countable resource for Medicare.
Medicare Savings Program
A program that helps pay for Medicare premiums, deductibles, and copays for eligible low-income individuals. ABLE funds are not a countable resource for the Medicare Savings Program.
Money Market Account
An ABLE account investment option available in some ABLE plans. A money market account is an option than an investment portfolio for shorter-term savings.
Moderate Risk
An investment approach that balances potential returns with moderate risk of loss of funds held on deposit.
N
Non-qualified withdrawal
Any part of a withdrawal from the ABLE account that is not for a qualified disability expense. Examples of withdrawals that may not be considered qualified include illegal activities and expenses that do not directly benefit the account owner.
P
Principal
The total amount of money deposited into the ABLE account.
Protection & Advocacy Component
Federal or state programs that provide free legal and advocacy support for people with disabilities.
Public Benefits
Government programs that provide income, health coverage, or services, such as SSI, SSDI, Medicaid, food, utility or housing assistance.
Q
Qualified Disability Expense QDE
An expense that improves the health, independence, or quality of life of the ABLE account owner. These may include expenses related to housing, education, transportation, job training, assistive technology, healthcare and basic living expenses.
R
Representative Payee RP
A person or organization designated by the Social Security Administration (SSA) to manage the SSA benefit payments for a person unable to do so. May be referred to as an SSA representative payee.
Return
The amount of money earned or lost on investment over time. The amount may be shown as a percentage.
Risk
The chance that an investment account will lose value. Generally, higher-risk investments can grow faster but can also lose funds.
Risk Tolerance
An investor’s ability and willingness to lose some or all their investment in exchange for greater potential returns.
Rollover
Authorized way to move money from one savings account to another without tax liability or penalty. A rollover is the tax-free transfer of funds to an ABLE plan. The funds may be transferred from a 529A qualified tuition plan or from another state 529A ABLE plan. There are both indirect and direct rollovers. A direct rollover may also be called a program-to-program transfer.
A federal tax benefit that may reduce taxes owed when an employed ABLE account owner deposits employment income into an ABLE account. In 2027, this term will be changed to Saver’s Match. The federal agency that regulates securities markets and protects investors. An organization or individual that provides support services to people with disabilities, such as case management, residential, healthcare, therapy, or vocational training. A sibling of the account owner includes siblings by blood or by adoption, including a brother, sister, stepbrother, stepsister, half-brother and half-sister. A federal agency which provides benefits for retired workers, people with disabilities, dependents and survivors. It is the agency that administers the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs. A federal program that provides benefits to people who have worked and paid Social Security taxes but are now disabled and unable to work. It can also pay benefits to eligible dependents who may be disabled. A legal arrangement that holds assets for a person with a disability without jeopardizing their eligibility for public benefits. There are distinct types of SNTs including first-party, third-party, and pooled trusts, each with different rules regarding funding and the use of assets. An individual can have a special needs trust and an ABLE account. Charges by the state ABLE program for account maintenance, investment management, or administrative costs. The eligible individual named in writing by the account owner or authorized individual, during the account owner’s lifetime, who will own the account upon the death of the account owner. This may be a taxable event if not a qualified sibling. This term is interchangeably used with successor beneficiary. The person or entity designated by the account owner or an authorized legal representative to serve as the replacement authorized individual in the event of removal, resignation, death or incapacity of the serving authorized individual. The person designated to inherit the ABLE account after the original beneficiary has died. The person must be designated prior to the original account owner’s death. This may be a taxable event if not a qualified sibling. This term is interchangeably used with successor account owner. A federal program that provides monthly cash payments to children with disabilities and adults who are blind, disabled or aged. Individuals must have low income and low countable resources to be eligible. A model of helping people with disabilities make their own decisions with support, rather than having a guardian or conservator make decisions for them. SDM is a less restrictive alternative to guardianship. The ABLE program rules align with the supported decision-making framework.S
Saver’s Credit
Securities and Exchange Commission SEC
Service Provider
Sibling
Social Security Administration SSA
Social Security Disability Insurance SSDI
Special Needs Trust SNT
State ABLE Program Fees
Successor Account Owner
Successor Authorized Individual
Successor Beneficiary
Supplemental Security Income SSI
Supported Decision-Making SDM
ABLE account investment growth is not taxed when it is used for qualified disability expenses. Money contributed to an ABLE account by family, friends, special needs or pooled trust, an employer or other sources besides the account owner. A fee charged every time you use a card for a specific transaction, or a fee identified in the disclosure document for another purpose. Young people typically between the ages of 15-26 who are taking steps from high school to adulthood while planning for education, work and benefits. A method of verifying a user’s identity by asking for exactly two pieces of proof. For example, it might require the password to an online account (the first factor) and a one-time passcode sent to an email address or mobile phone (the second factor). Two-factor authentication strengthens account security. It helps prevent unauthorized access, reduces the risk of breaches, and supports compliance across systems and users.T
Tax-Free Growth
Third-Party Contributions
Transaction Fee
Transition Youth
Two-Factor Authentication
How much and how quickly the value of an investment goes up and down.V
Volatility
Taking money out of the ABLE account to pay for qualified expenses. A period of time in which contributions will be held before becoming available for withdrawal. The number of days will vary based on the ABLE plan and the type of ABLE savings allocation (i.e., number of days may be different between deposits into a checking account versus an investment account). A free program that helps people with disabilities who receive SSDI or SSI benefits understand how work affects their Social Security and other public benefits. A WIPA employs CWICs. Refer to Benefits Counselor.W
Withdrawal
Withdrawal Hold
Work Incentives Planning and Assistance WIPA
ABLE NRC Revised 3-2026