A 29 bank account is a custodial savings account designed specifically for people with disabilities, held in the name of the disabled person but managed by a trusted family member or caregiver

The account gets its name from ABLE Act Section 529A, the federal law that created it. Unlike a regular savings account, money in a 29 account can grow without affecting the person's may be able to access for means-tested benefits like Supplemental Security Income (SSI) or Medicaid — two programs that normally count savings against you and cut benefits if you have too much.

The account holder (the disabled person) owns it and controls it, but because they may not be able to manage finances independently, a designated beneficiary — usually a parent, sibling, or other caregiver — makes deposits and withdrawals on their behalf. The account is held at a bank, credit union, or investment firm, just like any other savings account.

Key Takeaways

  • A 29 account lets a disabled person save up to $17,000 per year (2023 limit, adjusted annually) without losing SSI or Medicaid benefits.
  • The disabled person owns the account and is named as the account holder, but a caregiver manages it because the person may not be able to handle finances alone.
  • Money in the account can be used for disability-related expenses: education, housing, transportation, assistive technology, employment support, and health care.
  • If the account holder passes away, remaining funds go to their estate, not back to the government, so family members can inherit what is left.
  • Each state runs its own 29 program with different investment options and fees, so the account you open depends on where you live.

Who can open a 29 account

To open a 29 account, the person must have a disability that began before age 26 and causes substantial functional limitation. The disability does not have to be severe — it includes physical, mental, and sensory disabilities, as well as conditions like epilepsy, autism, cerebral palsy, and intellectual disabilities. The person does not have to be receiving SSI or Medicaid already; they just need to meet the disability definition.

The account owner must be a U.S. citizen or resident alien. A caregiver, family member, or legal representative opens the account on their behalf and is named as the authorized agent — the person who can deposit money, make withdrawals, and manage the account day-to-day. Only one authorized agent can be named per account.

The disabled person can have only one 29 account at a time, across all states. If they already have one open, they cannot open another, even if they move to a different state.

How much you can save without losing benefits

The annual contribution limit for 2024 is $18,000 per account holder (this limit increases each year with inflation). You can deposit up to that amount in a calendar year without it counting against SSI or Medicaid may be able to access. If multiple people want to contribute — a parent, grandparent, and aunt, for example — each can give up to $18,000 per year to the same account without triggering gift tax.

The total balance in the account can grow much larger. Unlike SSI, which cuts benefits if you have more than $2,000 in savings, a 29 account has no balance limit. You can accumulate $50,000, $100,000, or more, and the disabled person keeps their benefits. The only limit is the annual contribution amount per calendar year.

If you exceed the annual limit in a single year, the overage does not automatically disqualify the person from benefits, but it may be treated as a gift and could have tax consequences for the person who contributed. Check with a tax professional or the program administrator in your state before making large contributions.

What the money can be used for

A 29 account is meant to pay for disability-related expenses. The law defines these broadly to include education and training, housing, transportation, assistive technology and equipment, employment support, health care and wellness, financial management and administrative services, and legal fees related to the disability.

In practice, this means you can use the money to pay for a college course, a down payment on a house, a vehicle or vehicle modifications, a wheelchair or communication device, job coaching, therapy, medications, insurance premiums, and hiring an accountant to manage the account itself. You can also use it to pay back loans the disabled person took out for disability-related purposes.

You cannot use 29 account funds for general living expenses that are not disability-related — groceries, rent that is not part of a disability accommodation plan, or entertainment. The authorized agent must keep records showing how the money was spent in case SSI or Medicaid asks for proof.

How each state runs its own 29 program

There is no single national 29 account. Instead, each state operates its own program through a state agency or a contracted financial institution. The account you open depends on the disabled person's state of residency. Some states offer multiple investment options — money market funds, target-date funds, or conservative savings — while others offer only a single savings option.

Fees vary by state. Some programs charge an annual maintenance fee of $25 to $50, while others charge nothing. Some take a small percentage of the account balance each year. Before opening an account, check your state's program website to see what fees apply and what investment choices are available.

If the disabled person moves to a different state, they can keep their existing 29 account open in the original state, or they can roll the balance into the new state's program. Rolling over is usually free, but check both states' rules before moving money.

How to open a 29 account

Start by finding your state's 29 program. Search "[your state] ABLE account" or visit the National Disability Institute's website, which lists all state programs and links to each one. Contact your state's program directly — most have a phone number and online portal where you can begin the process.

You will need to provide proof of the disabled person's identity (birth certificate or passport), proof of disability (Social Security award letter, medical records, or a letter from a doctor), and proof of residency (utility bill or lease). The authorized agent will need to provide their own identity and proof of relationship to the account holder.

The application usually takes 15 to 30 minutes to complete online or by mail. Once approved, the account opens within a few business days, and you can begin making deposits. Most programs allow deposits by bank transfer, check, or automatic recurring transfer.

What happens to the account if the disabled person dies

If the account holder passes away, the remaining balance becomes part of their estate and passes to their heirs according to their will or state law. The money does not revert to the government or the state program. This is one of the key advantages of a 29 account — it is a real asset that can be inherited.

The authorized agent should notify the state program of the death and provide a death certificate. The program will close the account and issue instructions for transferring the balance to the estate or to whoever is named to receive it. The process typically takes a few weeks.

Frequently Asked Questions

Does having a 29 account affect SSI or Medicaid?

No. Money in a 29 account does not count toward the $2,000 resource limit for SSI, and it does not affect Medicaid may be able to access in most states. However, withdrawals from the account may count as income in the month they are received, which could temporarily reduce SSI benefits. Check with your state's SSI office about how withdrawals are treated in your specific situation.

Can the disabled person withdraw money themselves?

Only if they are able to manage finances independently. If they cannot, the authorized agent makes all withdrawals. Some programs allow the account holder to request a withdrawal in writing, which the agent then processes. Others restrict withdrawals to the agent only. Check your state's rules.

What if I want to change who manages the account?

You can name a new authorized agent by contacting your state's program and submitting a request. The current agent must usually sign off, or you may need a court order if the agent is unwilling. The process varies by state, so contact your program administrator for the exact steps.

Can I open a 29 account for someone who is not yet disabled but might be?

No. The person must have a disability that began before age 26 at the time the account is opened. You cannot open an account speculatively or for someone who may develop a disability in the future.

What if the disabled person already has savings in a regular account?

Those savings count toward the SSI resource limit and may disqualify them from benefits. You can roll existing savings into a 29 account, which removes them from the SSI calculation. This is called a rollover contribution and has no annual limit — you can move all of it at once. However, the money must have been in the person's name before the 29 account was opened.