How to Select a State ABLE Program (Part 1) – Only 10 Programs to Evaluate

Edited March 2024 – On Oct. 23, 2023, the Illinois State Treasurer (Illinois is the facilitator of the National ABLE Alliance) welcomed New Hampshire into the National ABLE Alliance as its 19th member. Previously New Hampshire did not accept out-of-state residents into their ABLE program and now that they are a member of the National Alliance they accept out-of-state residents.

Edited March 2023 – As of July 2022, the Colorado ABLE program elected to withdraw from the national ABLE Alliance. They say that it will take a year for the transition to be completed (by June 30, 2023). The New York ABLE program will now accept out-of-state residents. Due to the Colorado ABLE program creating its own, independent, ABLE program and New York now accepting out-of-state residents, there are now 10 ABLE programs to choose from.

I was in a meeting years ago where a visiting economic professor from Russia expressed being overwhelmed when visiting a local American grocery store for the first time. He was aghast that we, in America, sometimes had up to 5 different brands for any food time stocked on the shelves. Because of the mired of choices he was almost paralyzed to try and buy anything because he didn’t want to make the wrong choice. He also expressed how exhausting it was to have to make his way through the large food print of the store when he had thought that it would be a fairly straightforward trip to the store to get some food.

Choosing a state ABLE program may also feel overwhelming because of the many choices that appear to be available. Turns out that there are not that many choices (although almost every state has an ABLE program) for several reasons that I will discuss in this article.

Being overwhelmed by a perception of so many choices often delays someone for months, if not years, from deciding to start to use an ABLE account as part of their financial plan.

In this 2 part series of articles (How to Select a State ABLE Program), I will describe:

1. that there are only really 10 ABLE programs to choose from
2. what 5 deciding factors to use when selecting an ABLE program

So Many Choices – Not Really, There are Only 10.

The ABLE National Resource Center has a page titled “Choose the program that’s right for you!” and displays a map of all 50 states, showing that all but 4 of the states have an ABLE-sponsored program. The initial thought is that there are 46 state programs to dissect, review, chart features, parse through fees, analyze, review, interview, deliberate, negotiate, and sweat over.

The reality is that there are only a few programs to choose from, so no need to “evaluate each state program” or the need to “shop and compare” as most have said about ABLE programs.

You will see by the end of this article that there are really only 10 unique programs to choose from. Ready? Here is how we can get from 53 available ABLE programs down to just 10.

49 Available ABLE Programs to Choose From

There are only 46 of the states in the United States that have an ABLE program but there are 49 ABLE programs (I know, but I thought you said…, follow me here).

Washington DC has an ABLE program – and yes they are still not a state but insist on having one.
Four states (Idaho, North Dakota, South Dakota, and Wisconsin) do not currently offer an ABLE program so we can remove them from the list.

The Ugly Ducklings

There are two states that are unique, besides Washington DC pretending to be a state.

Oregon has 2 ABLE programs, one for in-state residents and one for out-of-state residents. We will take the one for residents off the list (just to narrow the list down – Oregon residents would do the opposite). The Oregon plan for out-of-state residents will be one of the remaining 10 to evaluate.

Virginia has 2 programs, one for anyone and one sold by financial advisors (ABLEAmerica). We will leave the ABLEnow program as one of the final 10 and take ABLEAmerica off of the list. You do not need to enroll in an ABLE program through a financial advisor for them to charge you indefinitely to have an ABLE account open.

According to the ABLEAmerica Program Description Document, the ABLEAmerica program is designed to be purchased through a financial advisor which will most likely have additional fees for that service. Removing those two ABLE programs off (Oregon ABLE Savings and Virginia ABLEAmerica) from the list we are down to 47 available programs.

47 Available ABLE Programs

With 47 programs available we will now remove 19 ABLE state programs that do not accept out-of-state residents. If you live in one of these 19 states leave your state on your potential list. Since we live in Texas I am keeping it on my list. You will want to consider your home state for reasons that will be discussed in the next article (state tax deduction or credit).

19 State ABLE programs that do not accept out-of-state residents:

Be sure to include your home state on your short list of 10, even if they do not accept out-of-state residents. My home state is Texas so I will leave it on the short list. This leaves us with 29 ABLE programs.

28 Available ABLE Programs

We are well on our way to narrowing down which state ABLE programs we can choose from.

Of the remaining 28 ABLE programs that accept out-of-state residents, 19 of those state programs are members of the National ABLE Alliance (NAA). Each state in the alliance uses the same underlying ABLE program. They have the same fee structure and the same investment choices. What differs from state to state is the state program name of course and the state tax deduction or credit, if one is offered by the state. They are most likely using the same central office, the same call center, and centralized services.

Using an ABLE program from a state in the National ABLE Alliance is like buying a Snickers candy bar from a 7-11 versus buying one from a Shell station, the product is the same as well as the cost, with a difference being that a potential tax deduction and/or tax credit may be available if you live in the same state as one of these ABLE programs.

When looking at these 19 states we selected the North Carolina program, to represent the other 18 states and the National ABLE Alliance (NAA), because one of my daughters had just lived in North Carolina and we loved the place and the people. We could have just as easily picked Montana as our program of choice. It would not make any difference to the outcome for us.

Again, if you reside in one of these 19 states you will want to select your state program instead of North Carolina to add to your list of programs to evaluate.

19 State ABLE programs that are part of the National ABLE Alliance (NAA):

By removing the 18 redundant NAA state programs (leaving North Carolina on the list) we are now left with 12 ABLE programs.

12 Available ABLE Programs

Four of the remaining 12 ABLE state programs make up the ABLE Collaboration (plus Washington which was already removed because they do not accept out-of-state residents). Similar to how the National ABLE Alliance is made up of 19 partner states, each of these 5 state programs calls themselves by their own state name but they are essentially the same program.

5 State ABLE programs that make up the ABLE Collaboration:

We will select Oregon to represent the ABLE Collaboration since they manage the program that is used by the other states in the Collaboration. If you reside in one of the other 4 states you may want to select your own state instead to see if your home state provides any tax deduction/credits when contributing to an ABLE account. This leaves us with 10 unique, different, ABLE programs to evaluate.

10 Unique ABLE Programs to Choose From

That’s it. This is the short list of unique ABLE programs to choose from.

These are the 10 state ABLE programs to evaluate:

Which state are you from? What are your final 9?
Did you add your home state to the list instead of including Texas (which is my home state and doesn’t accept out-of-state residents)?
Did you add your home state to the list instead of North Carolina – if your home state is a member of the NAA?
Did you add your home state to the list instead of Oregon – if your home state is a member of the ABLE Collaboration?
Bonus time, If you are from one of the final 9 states, except for Texas, then you have just 8 state programs to evaluate.

In the 2nd article in this series, I will outline what important features to consider when selecting an ABLE program.