CalABLE – Summing it Up!

How to Open an ABLE Account

Good news – you can handle the whole thing online. No in-person appointments or long lines. You’ll just need your basic info and a bank account for your first deposit. That deposit only has to be $25 to get started. Pretty easy!

Keep in mind, an ABLE account may be opened at any age, and the account is always opened in the name of the person who has the disability. But if clients want help managing the account, they can easily add someone they trust. Clients can choose to designate an authorized legal representative (ALR) to do the heavy lifting. They can also identify family and other caregivers to access the account and make deposits.

You can open a checking account, a savings account, and an investment account. But you do NOT have to open an investment account right away. The investment financial tools might feel complex and intimidating at first, and there will be plenty of state guidance as to what might be the best fit for each client, but you don’t need to feel pressured to use that function. These investment plans can be chosen by a client’s loved ones at some point down the line once they are comfortable.

The Rules for an ABLE Account

There are a few limits to keep in mind, but they’re pretty straightforward.

• If you want to keep your SSI benefits, just make sure your ABLE balance stays under $100,000.
• Even if your balance goes above $100,000, most of your benefits stay safe. You will still be eligible for Medicare, Medicaid, SNAP benefits, SSDI, housing assistance, and federal student aid.
• The maximum limit for an ABLE account depends on the state, but on average, it’s $450,000.
• Friends, family, and employers can collectively contribute a maximum of $19,000 per year, although that number is subject to change annually.
• If the client works, the client can deposit an additional $15,060 or an amount equal to their employment earnings (whichever is less), as long as the client is not contributing to a retirement plan with that employer.

The Best Way to Deposit

A simple routine can make saving easier. We recommend that clients spend their monthly expenses (rent, utilities, groceries, etc.) out of a checking account. When the month is over, any leftover money can be deposited into their ABLE account. This is just a suggestion – a habit that helps you save a little more each month.

How to Use ABLE Funds

Here’s the part people worry about — but don’t. ABLE funds can be used for way more than you’d think. Funds in an ABLE account can be used for qualified disability expenses (QDEs). “Qualified disability expenses” sounds official, but it covers a huge range of everyday needs.

QDEs are not disability-specific. They don’t just cover medically necessary expenses. They cover anything that helps our clients maintain their autonomy and improve their quality of life. They cover things like transportation, job training, supportive services, housing, and more.

As an example of how broad QDEs are, a parent of a client can withdraw money to buy a car that will help them transport their child. This is a daily living expense because it improves the life of the client.

It’s a good idea for clients or their representatives to look up what ABLE funds can be used for before making a purchase, but it does cover a lot of items and services.

Summing it Up

So that’s the nitty-gritty of an ABLE account. We know how the information on the web about ABLE makes it sound technical. It took us a little time to decipher it ourselves. But it’s a lot easier than it sounds. If you stick to the basics, it’s really simple, and we think this service will be a substantial help for our clients. We wouldn’t have written this post if we didn’t think so!