CalABLE: A Pathway to Financial Inclusion for Californians with Disabilities

By Elkin Hoyos

September 30, 2024

CalABLE-A-Pathway-to-Financial-Inclusion

For decades, Americans with disabilities faced a persistent financial challenge—the choice between essential public benefits and saving for the future—as restrictive asset limits in programs like Medicaid and SSI trapped many in poverty. The Achieving a Better Life Experience (ABLE) Act of 2014 federal law sought to address this issue by allowing individuals to save more without losing their benefits. Building on this foundation, California’s CalABLE program, launched in December 2018, has taken significant steps to further advance financial inclusion for the disability community.

Addressing Financial Exclusion

Strict asset limits and a lack of tailored financial products have historically excluded many with disabilities from traditional financial systems. For example, Supplemental Security Income (SSI), a federal program that provides financial assistance to individuals with disabilities and low income, imposes a $2,000 asset limit.¹ This limit discourages savings and perpetuates poverty, as individuals risk losing their benefits if they accumulate savings beyond this threshold. The impact of this exclusion is clear: 14.8% of working-age households with a disability are unbanked, compared to 3.7% of those without a disability.² Additionally, 16% of working-age people with disabilities live in poverty—double the rate of those without disabilities.³

CalABLE addresses these challenges by offering a tax-advantaged savings program that aligns with the unique financial circumstances of this community.

Removing Barriers to Savings: By allowing individuals to save more without losing access to essential benefits, CalABLE directly addresses the long-standing financial exclusion experienced by many. Additionally, families can now support their loved ones without jeopardizing benefits.
Providing Financial Tools: Diverse investment options and a user-friendly platform help ensure that individuals with varying levels of financial literacy and risk
tolerance can participate in the program and make informed decisions about their money.
Safeguarding Assets: Assets in a CalABLE account up to $100,000 are shielded from state recovery, ensuring that funds can be passed on to heirs without risk of state claims. This protection offers additional financial security for individuals with disabilities and their families.

Empowering Financial Independence

CalABLE empowers Californians with disabilities to take control of their financial futures by providing them with the tools and opportunities to save, invest, and build wealth.

Key features of CalABLE include:

Higher Contribution Limits: Annual contribution limit of $18,000, effective January 1, 2024.
Diverse Investment Options: Eight investment portfolios, including an FDIC-insured option for those with low risk tolerance.
User-Friendly Platform: An accessible online platform for easy account management.
Prepaid Card: The TrueLink ABLE Visa® Prepaid Card for convenient access to funds for qualified disability expenses.

These tools allow Californians with disabilities to confidently manage their financial futures.

Real Lives, Real Impact

CalABLE’s true impact is evident in its users’ stories:

Miguel C., a legally blind attorney, dreamed of owning his own home—a goal that seemed out of reach due to the financial restrictions imposed by his disability benefits. With his CalABLE account, Miguel has been able to save and invest strategically without jeopardizing his eligibility for vital public benefits. “My CalABLE account allows me to plan for and lead the life I want,” he shares. For Miguel, CalABLE is a gateway to achieving long-term financial goals that were once beyond his grasp.
Raymond J.‘s life took a drastic turn when he was paralyzed in a car accident at 21. Faced with the sudden need for expensive medical equipment and ongoing care, Raymond was unsure how he could afford to rebuild his life. Discovering CalABLE was a turning point. Through his CalABLE account, Raymond has been able to save for the specialized equipment he needs and pursue higher education, regaining control over his future. “It was learning of the CalABLE account that lit my vision with hope,” he explains. With CalABLE, Raymond is not just managing his finances—he’s reclaiming his independence and building a future filled with possibilities.
Otto L. is a high school senior with autism and apraxia, who has become an advocate for disability rights. He sees CalABLE as a means to drive systemic change. By saving for his future education and living expenses, Otto is setting the stage for a life of independence and advocacy. His motto, “Disability should not equate to poverty,” encapsulates the broader mission of CalABLE—to empower individuals with disabilities to break free from the constraints of financial insecurity and contribute meaningfully to society.

CalABLE demonstrates that with the right tools and support, people with disabilities can achieve the financial security they deserve. As more people like Miguel, Raymond, and Otto take control of their financial futures, the effects are felt throughout the state’s economy.

Inclusive Financial Systems Drive Economic Growth

CalABLE isn’t just about individual savings; it’s a catalyst for broader economic growth. According to a report by Oxford Economics, increasing household savings could lift GDP by about 3% by 2040, contributing trillions in economic output and creating a more stable economy.⁴ By enabling more Californians to save, invest, and fully participate in the economy, CalABLE is unlocking new opportunities for economic growth and innovation.

The financial industry is recognizing this untapped market, and society benefits from increased economic participation by people with disabilities. As CalABLE continues to unlock new opportunities for economic growth and innovation, it sets a powerful example for other states and nations seeking to create more inclusive financial systems.

Dream. Plan. Succeed.

Since its launch, CalABLE has empowered Californians with disabilities to save and invest over $100 million.

“Highly functioning and inclusive capitalistic systems flourish and survive only when governments set rules that treat each element of the overall economy fairly,” says Fiona Ma, California’s 34th State Treasurer and a Steering Committee member of the Council for Inclusive Capitalism. “This philosophy drives the approach to inclusive capitalism—a system where everyone, regardless of ability, can participate and thrive.”

For Californians with disabilities, CalABLE represents a pathway to financial independence, wealth, and dignity. By fostering financial independence and encouraging new savings, CalABLE not only reshapes the economic landscape but also positions California as a leader in creating a more inclusive and resilient economy.

This is inclusive capitalism in action, where empowering the marginalized strengthens the entire economic ecosystem.

Citations