As one of the three types of 529 plans, the ABLE account (also called a 529A account) carries many of the same benefits as an education savings plan or prepaid tuition plan, but with one important distinction: it’s intended to help Americans living with disabilities cover essential costs.

In many ways, it operates like an education savings plan, allowing account owners to invest funds that grow tax-free, provided they go toward a qualified expense. However, ABLE accounts offer far more flexibility; the beneficiary of one of these accounts can use their funds on health care costs, housing, and even job training. Plus, the first $100,000 in an ABLE account won’t factor into a person’s Social Security Insurance eligibility, so account owners don’t need to worry about the account limiting their income.