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Plan Well, Retire Well

Saving and investing your money

Saving and Investing When You Have Special Needs Child


My youngest son (a pre-schooler) suffered a serious brain injury in January due to an underlying medical condition. This was a very difficult episode for our family, and it included a six-week hospital stay in St. Louis, and now we find ourselves getting used to having a very different little boy in our family. Thanks to a wonderful team of doctors and therapists, as well as the support of our family and friends from our church, the university, and our neighborhood, we are pulling through and have welcomed our son home. My wife and I (and our other children) work with him daily, along with his doctors and a team of therapists, to promote a recovery of functions. Nonetheless, at the present time the reality is that my son has suffered a loss of capacity to understand his environment and to process information, his vision has been affected, and his ability to eat and drink independently (of a feeding pump) have been reduced. Like a lot of families, we find ourselves with a child in our family that has the distinct possibility of never achieving financial independence. Families with children with special needs face unique issues from the perspective of saving and investing and planning for the future financial security of the entire family.

First off, families with children with special needs find themselves very busy with care-giving activities in the present. They often focus so much on getting through the day to day activities that they do not spend much time planning for the future, especially its financial dimensions. Secondly, they often face high out-of-pocket expenses to care for their children. These expenses might be drugs to help treat a chronic condition, co-pays on medical visits and equipment, and the cost of traveling to out-of-town specialists and health care providers. Third, many of these families have foregone work opportunities (say for the spouse that is the primary care-giver) that would bring additional income into the family. These factors all make it more difficult for these families to save and invest for their future, despite the fact that they likely will have higher financial needs in the future compared to families without a special-needs child.

What steps can families like ours take to improve their chances at providing a secure financial future for all their members, including their special-needs child? A number of things come to mind, starting with making sure that the current care-giving situation is viable and sustainable. Parents in this situation need to be aware of options (through their circle of friends and family, as well as community) for respite care and additional care-giving resources. Support groups organized by a local hospital for families with special needs children are a good place to start. Likewise, parents need to speak with their social worker contacts to ensure the family is aware of all applicable private and public programs that might help them. Additionally, parents need to update their wills and make clear their intentions for care-giving and the future of their special-needs child (a letter of intent), should something happen to them. Parents also should begin an education and financial planning process that explicitly takes into account the possibility that their special-needs child may not be able to live independently as an adult. This process includes learning about special needs trusts and talking with lawyers and financial planners familiar with these issues. The parents also should take time to re-evaluate both their savings and investment strategy (and amounts they save monthly) as well as their insurance coverage levels.

Having a special needs child brings different responsibilities and experiences (including the joy of seeing your child grow and progress on their own terms, sometimes in spite of great challenges) from the parenting experience of most families. Taking the time to consider the long-term financial dimensions of this challenge can help families stay on track to a more secure financial future for all of their members.

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