More than 20 million families in the US have at least one member who has special needs. Their daily lives can be especially draining – not to mention expensive.
Lisa, whose son Will has autism, says that his school costs as much as college tuition. Insurance costs – premiums, co-pays, deductibles – add up quickly as well. And it can often seem as if you’re being pulled in a million directions, financially speaking, particularly if you have more than one kid: How do you keep things fair? How do you save for college for your other children? And how are you ever going to retire?
As is often the case with parenting, it’s all about doing the best you can, within reason (and cutting yourself a little slack on the rest). Here’s how to meet all the needs of your family – and yourself:
- Ask for help. We all have a laundry list of drains on our wallet, and it can feel like your salary is being pulled in many directions simultaneously, even if you don’t have a special needs child. When you do, the feeling is magnified. That’s a good excuse to bring in a professional, a financial planner who can help you prioritize your spending and make sure all of your bases are covered. He or she will also be able to help you set up a special needs trust, or introduce you to someone who can. This will help you set aside money for your child that he or she can tap later without interfering with government benefits. It’s important.
- Get life insurance. You may not have the cash available to fund a special needs trust, but what you can do is purchase a life insurance policy that will pay into that trust upon your death. This is a common way of funding the trust, and it’s also crafty: Leaving the money directly to your child as a beneficiary can also hurt their ability to qualify for benefits.
- Don’t forget about your retirement. It’s still important – you’re not going to be able to help your children if you’re broke yourself. I say it all the time: Retirement is the priority over college. In part, this is because if you don’t save for retirement, your kids may have to turn around and provide for you financially. In this scenario, that still holds true – your special needs child likely won’t be able to provide for you, and you’ll probably want to continue providing some support to them. So it’s important to build your nest egg.
- Consider tax breaks. You may be able to deduct medical and therapy expenses, as well as some legal expenses. In addition, the child and dependent care credit, which is worth up to $3,000 per dependent (with a maximum value of $6,000), generally expires when the child is over age 13. However, if he or she is physically or mentally unable to care for him or herself, you may qualify after that age, particularly if you paid for care so you could work. It helps to bring in an accountant come tax time.