Retirement in Special Needs Families

By Stephen J. Silverberg
New York Elder Law Attorney

The financial planning challenges for parents of special needs children are myriad and complex—and retirement planning presents one of the toughest challenges.

The big challenge for many Special Needs Families is balancing the financial needs of retirement with the long-term needs of a child with a disability. Those latter needs typically will outlive the parents.

Morningstar’s recent article, “Retirement Planning for Special-Needs Families,” explains that the need is growing. One in every five Americans has a disability, and 20 million families have at least one family member with a disability, says the National Disability Institute. The costs can be high, with the lifetime cost of caring for a person with autism ranging from $1.4 million to $2.4 million, according to an advocacy and research group. Lifetime costs are similar for people affected by other severe impairments.

While government benefit programs provide assistance, the eligibility rules vary depending on when a disability is incurred. There’s a set of rules for people disabled as children (prior to age 22) and another for those disabled at older ages. Here some key topics for consideration and action:

  • The care plan should include the safety of the child, with aspects of life fulfillment, including work, learning and play.
  • Projected cash flow needs will depend on the disability, the capability of the individual needing care and the level of care needed.
  • Investment allocations. Families with a child with special-needs should be more conservative in how they allocate their retirement portfolios, and maintain a higher level of cash.
  • Government benefits include Social Security, Medicare and Medicaid.
  • Families must understand all of the government rules on asset and income limits for a person with disabilities.
  • A Special Needs Trust is a critical part of a family retirement plan.
  • Beneficiary designations must be structured properly, because inheritances can jeopardize government benefits eligibility.

Quality planning is complicated. If your family includes a child with special-needs, please call the office to discuss how we can help.

About the Author
Stephen J. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA.