Building a Financial Plan for Special Needs Children

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While raising a child with special needs can be a rewarding experience, it also presents unique financial challenges.  Parents of special needs children must plan for both the child’s current needs and future needs. Below, I want to discuss how to build a financial plan for special needs children.

Understand the Disability

The first step in building a financial plan for a special needs child is to understand the disability. Not all disabilities are the same, and each requires a different level of care. For example, a child with Down syndrome may require a different level of care than a child with autism.

By understanding the disability, you can determine the level of care required and the related costs. This will help you build a budget and recognize potential sources of financial assistance.

Build a Budget

You can build a budget once you understand the disability and the associated costs. This budget should include all expenses related to the child’s care, including medical expenses, therapy costs, educational expenses, and living expenses.

To build a budget, start by listing all the expenses you currently have related to your child’s care. You want to make sure you estimate the cost of future expenses. And be sure to include the cost of any additional therapies or treatments that your child may need in the future.

Explore Government Benefits

There are many government benefits available to your family with a special needs child. These benefits can help offset the cost of care and improve the child’s quality of life. Some of the most common benefits include:

Social Security Disability Insurance (SSDI): This is a federal program that provides financial assistance to people with disabilities who are unable to work.

Supplemental Security Income (SSI): This is a federal program that provides financial assistance to people with disabilities who have limited income and resources.

Medicare and Medicaid:   Medical coverage for people over 65, certain disabilities, or low income.

To determine if you, or your child, are eligible for these benefits, contact your local Social Security Administration office or Medicaid office.

Consider Life Insurance

Life insurance is an essential component of any financial plan, but it is especially important for families with special needs children. If something were to happen to you, your child would be left without a primary caregiver and financial support.  Talk to your financial professional and find out which type of insurance is best suited to your situation.

Set up a Special Needs Trust

A special needs trust is a legal arrangement that provides financial support to a special needs child without disqualifying them from government benefits. This is because the assets in the trust are not counted when determining eligibility for government benefits.

A special needs trust can be funded with cash, investments, life insurance proceeds, or other assets. The trustee is responsible for managing the assets in the trust and using them for the benefit of the child

Plan for the Future

As a parent of a special needs child, it is important to have a plan.  And in that planning, you must consider two things.  Saving for your own retirement and also what happens to your child when you are gone. Consider the following:

Retirement planning: Make sure you are contributing to a retirement account, such as a 401(k) or IRA, to ensure that you have enough money to support yourself in retirement.

Estate planning: Create a will.  This will outline your wishes for the allocation of your assets after you are gone. Consider setting up a trust for your child.

Guardianship: Appoint a guardian for your child in case something was to happen to you.


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