Financial Planning Considerations for Individuals and Caregivers of Those with Special Needs
November 14, 2017 by Tom Halloran
As you may have read in my recent article in U.S.News & World Report on “3 Unique Financial Issues for Special Needs” – according to the National Organization on Disability, more than 57 million people across the U.S. are living with a physical or cognitive disability. With limited assistance from government programs, this group – along with their caregivers – will need to consider additional planning decisions, especially when it comes to creating a holistic financial strategy for retirement.
As with any challenge, knowing where to begin can be the hardest part. To help you get started, here are some considerations to keep in mind — no matter what your situation.
Planning for a child with disabilities. Advances in education, early intervention and support services have made it feasible for many adult children with disabilities to achieve some level of independence. Whether your loved one will remain in the comfort of their childhood home or live independently in the future, it’s likely you’ll need to maintain some level of support whether in the form of caregiver services, housing or transportation. You will also need to make sure he or she has the means to continue this type and level of care after you have passed. This is where working with an advisor with experience serving the special needs community can be especially helpful. They can help you avoid missteps when it comes to beneficiary choices, educate you on navigating government benefits and should be able to help connect you with the network of professionals to help fully build out your strategy.
Planning while living in the sandwich generation. According to Pew Research, about one in seven middle-aged adults provides financial support to both an aging parent and a child. If you’re part of this “sandwich generation,” odds are you’re struggling to care for an elderly parent over the age of 65, while simultaneously providing for children under the age of 18. Providing care for a parent with disability often entails a significant amount of emotional and financial stress. While it might seem selfish to pay yourself first for retirement in this situation, in reality, the opposite is true. Your parent might qualify for government benefits to cover living expenses and medical costs, and your child(ren) could be eligible for a student loan to help with the cost of college tuition. But, you won’t be able to take out a loan for retirement, so it’s important to identify all of the alternative funding sources and consider all expenses in order to make retirement planning a priority.
Focusing on protection. We understandably spend a great deal of time working to succeed in our jobs and careers. But, it’s also important to make sure you have a safety net to fall back on should an unexpected event cause a prolonged absence from work — or force you to stop working entirely. If you’re the primary earner, you might also consider disability insurance or long-term care insurance, which might be available to you through an employer or purchased outside the workplace. Outside of workplace benefits, entitlements are also available to anyone who meets the eligibility requirement. Social Security Disability Insurance (SSDI), for example, is a program designed for people with disabilities or special needs that have a work history and have contributed to Social Security but have been unable to work for at least a year.
While navigating government benefits for special-needs financial planning may seem overwhelming, these benefits can provide valuable resources and can serve as a good foundation of your broader special-needs financial plan.
And remember; whether you’ve already started the process or are unsure where to begin, working with an advisor that has experience with special needs planning can help guide you through the journey.
A full version of this article can be found on U.S.News & World Report.