07/31/2026
Newly created Trump Accounts allow starter IRAs to be set up for children who will not reach age 18 before the end of the year. They permit contributions of up to $5,000.00 per year. For children born from 2025 through 2028 the government will also contribute $1,000 to start the account. Funds generally cannot be withdrawn before January 1st of the year in which the child becomes age 18, when the fund becomes a traditional IRA owned by the child.
All well and good, unless the child becomes disabled. Once the disabled child reaches age 18 and parental income and resources are not considered, they might become eligible for Supplemental Security Income Disability, which has limits for countable income and resources. However, once the IRA is the children at age 18 it counts toward the SSI resource limit, currently $2,000.00, and as income when turned over to them.
There is one possible narrow loophole for parents of disabled children, but it could easily be missed.
To back up a bit, parents of disabled children that I represented over the years often would ask me, “what is going to happen to my child when I am gone, if everything I provide them means they lose government benefits, and I do not have enough for them to live on my money alone?”
To address that concern, ABLE accounts were created in 2014 as tax-free savings accounts for children and young adults disabled before a certain age (now before age 46), the first $100,000 of which is not counted toward SSI resource limits, and not counted as income if used for “qualified disability expenses”. SSI monthly benefits help disabled individuals, but at least as important is the Medicaid coverage that comes with eligibility for SSI.
The Trump Account law permits a rollover of the Trump IRA to an Achieving a Better Life Experience (ABLE) account, but only once, only for the entire amount in the IRA, and only in the year the child becomes age 17. If the rollover amount exceeds $100,000, the excess is counted toward the SSI resource limit. If it is rolled over too late, the entire balance becomes the child’s SSI-countable resource.
The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE) became law on December 19, 2014. The law aims to ease financial strains faced by individuals with disabilities by making tax-free saving accounts available to cover qualified disability expenses.
