Special needs families & retirement: Three steps to success

It is common for parents to do everything they can to help better ensure their children’s happiness. Ideally, we hope that our little loved ones will find independence as well.

Many do, some do not. Some require extra care as a result of a physical or mental disability. In these situations, parents still wish for happiness but the goal of independence can take a different path.

When attempting to plan this path, parents may find that the trajectory of their retirement plans is impacted. Those who plan wisely can still make the most of their retirement while still ensuring their loved ones receive the financial support they need.

How can I provide for a special needs child and still retire at a reasonable age?

This takes proactive planning. A recent publication by Financial Advisor discussed the challenges that come with planning under these circumstances, touching on everything from increased financial reliance of the child on the parents to figuring out the best way to invest.

These challenges can be overcome. Three steps that can apply to most people that find themselves in this situation provided within the piece include:

• Use the right tools. Various legal tools are available that can help you meet you retirement needs. One tool that works particularly well in this situation is a special needs trust. This trust allows for those with special needs to receive financial assistance in a way that does not impede eligibility into government assistance programs like Medicaid or Social Security Disability.
• Keep money flow in mind. It is tempting to put a good chunk of funds into the market. Investing is wise, and funding of high risk investments early in your career can work well, but those with loved ones who have special needs may want to ultimately plan for a larger availability of cash. If the market takes a turn, the availability of cash can help to better ensure the ability to meet everyday needs.
• Communicate. Once a plan is set-up, communicate how the plan will work and what your wishes are to loved ones that could be impacted. This will better ensure a smooth transition.

Although these tips are fairly foundational, they are not simple. The special needs trust, for example, is set-up with the use of various documents. If these documents are not worded correctly, the trust may not function as intended.

As a result, it is wise for those who are planning their retirement needs contact an experienced attorney.