Investment options

• What disability-related expenses do I need to pay for today, tomorrow, next week or next month? These are called short-term expenses.
• What disability expenses do I want to save for down the road, perhaps in 1-3 years? These are called medium-term expenses.
• What disability expenses do I want to save for in the longer term? Example: over the next four years or more. These are called long-term expenses.

When thinking of savings and investing, think about your short-term, medium-term and long-term disability-related expenses. This can help you decide whether and which of the checking or investment options are right for your ABLE account.

Risk is any uncertainty in the financial markets, now or in the future, that has the potential to negatively affect the money you invested. In other words, when you invest your money, the investment values might rise or fall because of market conditions, which means that your account balance could increase or decrease.  This is not the case in the ABLE Checking account option. In the ABLE Checking account option, your funds are insured by the Federal Deposit Insurance Corporation (FDIC) and are not exposed to market fluctuations.

How do changes in financial markets affect what I want to use my ABLE funds for? How will I feel if the value of my ABLE account balance changes because financial markets are going up or going down? Your answers to these questions will help you determine your “risk tolerance.” It means the degree to which you, the investor, are comfortable with your invested money increasing or decreasing because of fluctuations in the financial markets.

Think about the current, medium-term and long-term disability-related expenses that you are saving for and decide when you will want to use the money in your ABLE account. This will help you decide what your risk tolerance is and will influence which ABLE investment options you choose.

Below are some examples of how some hypothetical account owners go through the process of matching their needs with their timing and risk tolerance in making their investment and/or checking option choices:

John needs a new computer

John’s short-term goal is to save enough money to buy a computer at the end of the year. He will not be comfortable with the possibility of the value of his investment going down between now and the time he buys the computer. John’s risk tolerance could be described as low. Based on his needs, timing and risk tolerance, John is considering the Conservative, Moderately Conservative and the Checking Option. These options have the greatest chance of preserving his account value in the short-term.

Anne wants a new wheelchair in a few years

Anne’s goal is to buy a new wheelchair in about three years and she wants to begin saving for it now. She hopes to see her the value of her investment grow steadily so that she can pay for a new wheelchair but understands this is not guaranteed. Anne decides that she has moderate risk tolerance for the potential ups and downs of the financial markets and that a combination of stocks and bonds will best fit her needs, timing and risk tolerance. Anne is considering investing in the Moderate, Growth, or Moderately Aggressive Option or a combination of those options. These options have the greatest chance of higher returns while preserving capital during Anne’s three-year outlook.

Lisa’s parents are investing for down the road

Lisa is a toddler with a disability whose parents want to grow her ABLE account to use after she finishes high school. Lisa’s parents are comfortable with potentially big swings in the financial markets and know that prices may fluctuate a lot over the long-term. They would be considered to have high risk tolerance, and they decide to invest funds in the Moderately Aggressive and Aggressive Investment Options, where there is a higher chance for fluctuation in the account value both up and down, but also a higher chance of returns over the long term.