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CalABLE

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CA resident benefits

CalABLE is offered by The California Achieving a Better Life Experience (ABLE) Act Board. Assets in CalABLE are held in the CalABLE ABLE Program Trust for which the Board serves as the trustee. Vestwell Tuition Financing serves as program manager. The plan offers three target risk investment options and one FDIC-Insured portfolio.

OVERVIEW

Program type

ABLE Savings Plan

Investment manager

BNY Mellon Advisors

Inception

2018

State agency

The California ABLE Act Board

Program manager

Program managed by Vestwell State Savings, LLC.

Manager contract term

MORE INFORMATION

Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

An eligible individual may open an account for himself or herself. He or she must: (1) Be a U.S. citizen or an individual residing in the United States; (2) Be 18 years of age or older with the legal capacity to contract; (3) Have a Social Security number or other taxpayer identification number; and (4) Have a U.S. permanent address that is not a Post Office Box.

Program restrictions:

An account may be opened by or on behalf of any person who is eligible under Section 529A. An individual is an eligible for a taxable year if, during that year, either: (a) The individual is entitled to benefits based on blindness or disability under Title II or XVI of the Social Security Act ("Social Security Disability Eligibility"); or (b) The individual has a disability certification meeting specified requirements ("Certification Eligibility"). In all cases, the blindness or disability must have occurred before the individual's 26th birthday.

Did you know?

The plan can be used to pay for qualified disability expenses.
This can include education, job training and support, healthcare and financial management.
Savings in an ABLE account will not impact eligibility to receive government benefits.
The first $100,000 is exempt from the Supplemental Security Income limit, and beneficiaries will continue to receive Medicaid regardless of account size.
Residents are not limited to investing in their own state's ABLE plan.
Another state may offer a plan with better suited investment options, lower fees or preferred features.
Visit this plan's website to learn more.

Contributions

Maximum contributions:

Maximum contributions: Annual contribution limit is currently $17,000 from all sources. If the beneficiary works, the beneficiary can also contribute part, or all, of their income to their ABLE account. This additional contribution is limited to the poverty-line amount for a one-person household. For 2024, this amount is $14,580. The designated beneficiary is not, however, eligible to make this additional contribution if their employer contributes to a workplace retirement plan on their behalf. Account balance limit of up to $529,000 per account owner. Assets can grow beyond $529,000.

Minimum contributions:

The minimum initial contribution amount is $25, and the minimum subsequent contribution amount is $1.

Does the program offer an e-gifting platform for receiving gift contributions?

Gifts may be made by family and friends via two channels: (1) Paper Forms with a check; or (2) Online via your bank account or a debit card. To make a paper contribution, simply download the gift form from the CalABLE.ca.gov website and attach a check. To make an online gift you must be invited to make the contribution by the account owner. Fees may be assessed for online gifting.

Investment Options

Target-Risk Options:

Each Target Risk Investment Option has its own investment objective and strategy based on a targeted risk level. Select among 7 investment options: Income Portfolio, Conservative Portfolio, Income and Growth Portfolio, Balanced Portfolio, Conservative Growth Portfolio, Moderate Growth Portfolio, and Growth Portfolio.

Bank Money Market Investment / Checking Option:

Account assets in the FDIC-Insured Portfolio are 100% invested in an interest -bearing custodial account at the Bank of New York Mellon.

Fees & Expenses

Enrollment or application fee:

None

Account maintenance fee:

A $30 annual Account Maintenance Fee will be withdrawn from your ABLE Account pro-rata at the end of each calendar quarter. Accounts that elect to receive CalABLE documents by mail will be subject to an annual $10 Print and Paper Mail Delivery Fee, ($2.50 assessed quarterly).

Program management fees:

Annual State Administration Fee of 0.28% for the FDIC-Insured Portfolio

Expenses of the underlying investments:

Ranges from 0.03% to 0.08%; None for the FDIC-Insured Portfolio

Total asset-based expense ratio:

0% - 0.46%, depending on investment options chosen.

Fees or restrictions on the number of disbursements

None., Withdrawals may be made at any time and for any reason, but there may be adverse tax and government benefit consequences associated with non-qualified withdrawals.

Taxes and other Benefits

Program match on contributions:

None

State tax deduction or credit for contributions:

None

State tax recapture provisions:

None

State tax treatment of qualified distributions:

The earnings portion of qualified withdrawals will not be included in taxable income for California state tax purposes.

State tax treatment of rollovers:

An incoming rollover from a Section 529 Plan account to an ABLE account may be subject to California income tax. Qualified withdrawals and outgoing rollovers are not subject to California income tax.

Medicaid eligibility

The Federal ABLE Act requires that account balances may not be taken into account in determining the beneficiary's eligibility to receive benefits under Medicaid/Medi-Cal, and that balances of up to $100,000 will not be taken into account for purposes of determining the beneficiary's eligibility to receive benefits under the Supplemental Security Income program or any California state or local means-tested program.

Medicaid recapture provisions

Under Section 529A, following the death of the account owner, any state may be required to file a claim against the account owner or the account itself for the amount of the total medical assistance paid for the account owner under the state's Medicaid plan (in California, Medi-Cal) after the establishment of the account (or any ABLE account from which amounts were rolled over or transferred to the current account). The amount paid in satisfaction of such a claim is not a taxable distribution from the account.

Is there a debit card/ purchasing card available, and if so, at what cost?

The ABLE Visa Prepaid Card will be issued by Sunrise Bank ("Issuing Bank") in accordance with the terms of the Cardholder Agreement established by the Issuing Bank. The ABLE Visa Prepaid Card program will be managed by True Link Financial. $2,50 per month (currently waived) Beneficiaries can request a Visa Card for free at the ABLE Visa Prepaid Card program's website managed by True Link Financial.

Statutory protection of an account from creditors:

Distributions & Terminations

To whom are distributions made payable:

Only the beneficiary or an authorized legal representative may direct withdrawals from an account.

Account Changes

Policy regarding participant/owner changes:

A change in the account owner of an account is treated as an outgoing rollover, not a non-qualified withdrawal, if the new account owner is a sibling of the former account owner and an eEligible individual. However, if the new account owner is not an eligible individual and a sibling of the former account owner, the change is treated as a non-qualified withdrawal by the former account owner. A change in the account owner or a transfer to an account for the new account owner may have federal gift tax or Generation-Skipping Transfer (GST) tax consequences.

The beneficiary for an account may be changed without tax consequences only if the new beneficiary is a sibling of the current beneficiary and is otherwise an eligible individual. A change of beneficiary to a person other than a sibling who is also an eligible individual would be a non-qualified withdrawal subject to federal and state taxation and could adversely affect the beneficiary's eligibility for federal and state benefits.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

Contact

Website:

https://calable.ca.gov/

Telephone:

833-225-2253

Email:

CalABLE@treasurer.ca.gov

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