How do parents of children with special needs, whether that child is 5 or 35, predict just how much money their disabled child will need for their future comfort? There are many variables to consider, including: life expectancy; the rate of inflation; investment return; the amount of benefits the government will provide decades from now (although it is fairly safe to assume recipients of Supplemental Security Income (SSI) will never receive enough cash benefits to rise above the poverty level).
Luckily, special needs financial calculators are available free of charge to help you and your estate planning attorney or financial planner determine the cost of providing your child with lifelong support. Just click on one of the following links to start the process:
Taking the Guesswork out of Funding a Supplemental Needs Trust
Step One: Assess your child’s future capabilities. This is more difficult if your child is still young. Speak to your child’s medical professionals and ask for an evaluation of your child’s prospects, both short- and long-term. If your child is already an adult, you will already have a better understanding of what his or her needs are now and might be in the future.
Step Two: Take an inventory of what you already own. Add life insurance policies, if any.
Step Three: Identify current and future living expenses and future income sources for your special needs child. Your disabled child may be able to earn income and contribute financially. Consider the government benefits and support your child is already receiving or might receive in the future. If your child is currently living with you, will that child be eligible for subsidized housing? Will there be gifts and inheritances from other family members?
Step Four: Place a dollar value on anticipated income and expenses. The online calculators use broad categories such as housing, transportation, medical care, education, or you can use more detailed lists within each category.
Step Five: Calculate! Using assumptions about the rate of inflation and your investment returns, you should now have a target to help you plan for your child’s future needs.
Working Towards Your Goal
Although many of these questions are very difficult for parents to consider, and very difficult to answer, beginning the process of planning for the future security of your loved ones will make you feel more secure now.
As always, if you have any questions about this post, please feel free to either call or contact me through the contact or comments form.