Investment and Savings Options
When you decide to set up an ABLE account, one size doesn’t fit all. That’s why we’ve proposed several investment options to help you find the one that best fits your needs.
Choosing cash v. investment
If you’re interested in simply saving your money, the Cash Option deposits 100% of the funds into an FDIC-insured account with The Bank of New York Mellon.
FDIC cash option
The FDIC Savings Fund is an FDIC Insured Savings Account option. Funds will be placed in an FDIC-insured account with the Bank of New York Mellon (Bank). FDIC insurance generally protects up to $250,000 of your deposits at the same bank in the same ownership right and capacity. Your ABLE Account invested in the FDIC Savings Fund, taken together with other deposits you hold in a single ownership basis at the Bank, will be insured up to $250,000.
For more information about this option, be sure to review the Plan Disclosure Booklet for specific risks and be sure to check with an investment professional if you need advice.
Investment options
You may also choose from three investment portfolios with different investment strategies: ABLE Conservative, ABLE Moderate, or ABLE Aggressive. Each investment option has its own benefits and risks — compare them below:
ABLE Conservative
The ABLE Conservative Investment Option seeks to provide current income and some growth by investing in a portfolio of mutual funds intended to produce an overall investment exposure of approximately 30% stocks and 70% bonds. Overall, there is a somewhat reduced level of risk and a more limited appreciation potential, designed for investors with a shorter investment period.
ABLE Moderate
The ABLE Moderate Investment Option seeks to provide a combination of growth and current income by investing in a portfolio of mutual funds intended to produce an overall investment exposure of approximately 60% stocks and 40% bonds. Overall, there is a medium level of risk for a pursuit of investment return, designed for investors with a medium or uncertain time horizon.
ABLE Aggressive
The ABLE Aggressive Investment Option seeks to provide the potential for asset growth by investing in a portfolio of mutual funds intended to produce an overall investment exposure of approximately 80% stocks and 20% bonds. Overall, there is a high level of risk and the potential for higher return. This option is designed for investors with a longer time horizon (10 years or more). Of the three options, this carries the highest risk of loss.
| Percent Allocation of Investment Option | ||||||||
|---|---|---|---|---|---|---|---|---|
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ABLE Conservative Portfolio
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ABLE Moderate Portfolio
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ABLE Aggressive Portfolio
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| Fund Name | Ticker | |||||||
| Vanguard Total Stock Market Index Fund | VSMPX | 19% | 36% | 49% | ||||
| Vanguard Total International Stock Index Fund | VTPSX | 8% | 19% | 26% | ||||
| Vanguard Real Estate Index Fund | VGSNX | 3% | 5% | 5% | ||||
| Vanguard Short-Term Bond Index Fund | VBITX | 22% | 9% | 4% | ||||
| Vanguard Total Bond Market Index Fund | VBMPX | 35% | 27% | 13% | ||||
| Vanguard Short-Term Inflation-Protected Index Fund | VTSPX | 13% | 4% | 3% | ||||
Fees
There’s a low annual fee of $35 for each Alabama ABLE account. There are also low fees on the underlying mutual funds, which are a part of each of the investment options, and an administrative fee assessed on the overall account assets. These add up to between 0.30% and 0.34% of the account’s balance per year. Additional fees are added when you opt out of electronic statements or request a withdrawal check. You can check them out in our Fees FAQ.
