Designing Savings Accounts to Promote Asset Building for Individuals With Disabilities: Experimental Evidence on ABLE Accounts

Abstract

U.S. benefit programs like Social Security Income (SSI) and Medicaid impose strict asset limits for eligibility, which create a substantial disincentive to save. Due to structural and systemic barriers, households with a member who has a disability (HMDs) are more likely to have low financial security. Achieving a Better Life Experience (ABLE) accounts, which are excluded from SSI and Medicaid asset tests up to a certain amount, seek to increase savings among HMDs. However, ABLE account take-up has been low, with less than 2% of eligible households participating. This article examines awareness levels of ABLE accounts and how the account structure itself may deter uptake. First, using national survey data of low-income tax filers, we find low awareness of ABLE accounts among low- and moderate-income (LMI) adults living in HMDs, which generally did not significantly differ across demographic and financial characteristics. Second, we test how annual fees and minimum account balance requirements affected self-reported likelihood of saving in an ABLE-type account. The results showed that annual fees significantly reduced the likelihood of saving but minimum balance requirements did not. This work has implications for policymakers, practitioners, and industry professionals interested in increasing savings without risking benefits eligibility for people with disabilities.