The CalABLE Program: ABLE Accounts Now Available in California

By Kenton Koszdin on September 10, 2023 | In Social Security Disability

What Is a CalABLE Account in California? – A Comprehensive Guide

California’s CalABLE program is a financial tool designed to empower people with disabilities to achieve a better life. The program offers tax-advantaged savings accounts for eligible individuals, allowing them to secure their financial future without jeopardizing their essential government benefits.

With a comprehensive knowledge of disability law and a commitment to client education, a Social Security attorney Kenton Koszdin is uniquely positioned to guide you through the complexities of the CalABLE program and ensure that you can make informed decisions about your financial future.

What Is CalABLE?

The California Achieving a Better Life Experience (CalABLE) program is a major financial project that provides tax advantages to people with disabilities to help them save and invest without affecting their SSI eligibility. It allows these individuals to save for qualified disability expenses without losing their benefits under federal law.

The program’s professional tone and approach ensure that the needs of people with disabilities are met with respect and dignity, fostering an environment of inclusivity and financial stability.

Benefits of a CalABLE Account

Benefits of a CalABLE Account

A CalABLE savings account offers a multitude of benefits that can significantly enhance the financial stability and independence of individuals with disabilities.

One of the primary advantages is the state income tax deduction. Contributions made to a CalABLE account aren’t tax-deductible on a federal level, but the investment earnings are tax-free if used for qualified disability expenses, leading to substantial savings over time.

Additionally, the funds from this account can be withdrawn at any time for disability-related expenses, including housing, providing a level of financial flexibility that’s often crucial for people with disabilities.

Importantly, the assets in a CalABLE account don’t affect eligibility for means-tested government aid and benefits, such as Supplemental Security Income (SSI) or Medicaid, up to a certain limit. This allows eligible parties to save without jeopardizing their essential support.

How a CalABLE Account Works

Deposits to the account can be made through various means, including online transactions, checks, or automatic transfers made from a bank account. Additionally, other parties, such as family members and friends, have the option to contribute directly to the CalABLE account.

To further understand this beneficial program, let’s examine its specific eligibility criteria and limitations.

Who Is Eligible for a CalABLE Account?

Eligibility for a CalABLE account is determined by a couple of key factors.

For one, the individual must have a significant qualifying disability that began before the age of 26. They must also be receiving benefits under SSI or SSDI (Social Security Disability Insurance).

Alternatively, the individual may obtain a disability certification from a physician stating that their condition is identified as a physical or mental disability resulting in functional limitations that are expected to persist for at least twelve months.

Limitations and Other Considerations

Limitations and Other Considerations

While it offers numerous benefits, the CalABLE program also has certain limits that potential users should be aware of.

One of the primary constraints is the contribution limit. The program stipulates that the total annual contribution for a beneficiary cannot exceed $17,000. This limit applies to all contributions from all sources, including the beneficiary, family, friends, and others.

Furthermore, the total balance across all accounts for a beneficiary cannot exceed $529,000. This cap may limit the financial growth potential for beneficiaries with significant long-term needs.

A starting deposit of $25 is necessary to open an account. After that, each additional contribution must be at least $25.

In addition to contribution limits, the CalABLE program also imposes usage restrictions. The funds in ABLE accounts can only be used for qualified disability expenses, which include:

  • Education
  • Housing expenses
  • Transportation
  • Employment training and support
  • Assistive technology and related services
  • Health
  • Prevention and wellness
  • Financial management and administrative services
  • Legal fees
  • Any other qualified disability expense

Non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax.

While it costs nothing to open an account, the program levies quarterly maintenance and annual asset-based fees.

The maintenance fee is $37 per year but can be reduced to $11.25 for account holders who elect to receive electronic statements. The annual asset-based fee varies depending on the investment option chosen, ranging from 0.44% to 0.52% of the overall balance.

Moreover, if the balance exceeds $100,000, the beneficiary’s Supplemental Security Income may be suspended until it falls below that threshold. However, their Medicaid eligibility won’t be affected.

Investment and Saving Choices with CalABLE

When setting up your CalABLE account, you have the opportunity to select from various savings and investment options tailored to your comfort level and financial goals. Your options include:

  • FDIC-Insured Portfolio: A low-risk, interest-bearing deposit account
  • Conservative Portfolio: Offers guaranteed minimum interest rates
  • Moderate Portfolio: Also comes with guaranteed minimum interest rates but might carry slightly higher risks than the Conservative option
  • Aggressive Growth Portfolio: This is aimed at long-term growth and is based on investments in stock funds, making it suitable for those comfortable with higher risk in exchange for potential higher returns

How to Open a CalABLE Account in California

How to Open a CalABLE Account in California

Opening a CalABLE account is a straightforward process that involves several basic steps.

1. Register an Account

Visit the official CalABLE website and select the “Open an Account” option. This will redirect you to another page, where you’ll be required to provide personal information like your name, address, Social Security number, and date of birth. It’s important to ensure that all provided information is accurate to avoid complications.

2. Designate a Beneficiary

The beneficiary is typically the individual with a disability for whom the account is being opened. You’ll need to enter their name, Social Security number, and date of birth. The beneficiary must be a resident of California and must have been diagnosed with a disability before the age of 26.

3. Choose an Investment Option

CalABLE offers a number of investment options to suit different risk tolerances and financial goals. It’s advisable to carefully review each option and consider seeking advice from a financial advisor if necessary.

4. Make an Initial Contribution

As mentioned, the minimum initial contribution is $25. You can pay via electronic funds transfer from a bank account or by mailing a check.

5. Agree to All Terms

You must review and agree to the terms and conditions of the CalABLE program. This includes understanding the tax implications of the account, the fees associated with the account, and the impact of the account on the beneficiary’s eligibility for public benefits.

6. Submit Your Application

Once you’ve read through the terms and conditions, you can submit your application. The program’s officials will review your application; if it’s approved, you’ll receive a confirmation email with your account details.

Get Help Setting Up Your CalABLE Account

Get Help Setting Up Your CalABLE Account

CalABLE stands as a revolutionary means to empower and uplift people with disabilities, ensuring that they can gain financial stability without compromising their benefits. Kenton Koszdin Law Office is dedicated to helping clients navigate the intricacies of such financial avenues, providing trustworthy advice and guidance.

If you or a loved one are considering starting a CalABLE account, don’t hesitate to reach out to an authorized legal representative today and take the crucial first step toward achieving a better life.


How does a CalABLE account differ from a traditional savings account?

Unlike ordinary savings accounts, a California ABLE account offers distinct tax advantages and doesn't affect eligibility for certain government benefits.

Is it possible for someone who doesn't live in California to start a CalABLE account?

Only California residents are eligible to open CalABLE accounts. That said, other similar plans are offered nationwide.

What happens to the account funds upon the beneficiary's demise?

The funds can be used to repay the state for any medical assistance benefits received. Any remaining funds can be distributed to the estate or designated heirs.
Simple Share Buttons