Guest Post: by New Millennium Insurance Services, Inc.
What parents of special needs kids should know when planning for retirement money is sometimes a difficult subject to discuss, especially when planning for retirement. Many Americans are busy trying to figure out how much they will need for themselves, so planning to care for a child with special needs sometimes falls by the wayside. In fact, recent estimates show that about 58 percent of Americans die without a will, leaving their loved ones financially vulnerable. So carefully planning for retirement is critical, especially when supporting a person with a disability or special needs.
Technology has advanced and people are living longer, including those with special needs. For example, according to Derek Overstreet, president of New Millennium Insurance Services, Inc., the average life expectancy for people with Down syndrome has increased from 25 years in 1983 to 60 years today.
The statistics show why it is more important than ever to have your retirement plans in order when caring for someone with special needs. For the first time in history, people with disabilities are outliving their parents, and without proper financial planning, it could lead to disaster.
The parents of children with special needs children should have these documents when preparing to retire:
- Last will and testament
- General durable power of attorney for financial affairs
- Durable power of attorney for health care
- Letter of intent
- Guardianship plans
- Special needs trust
The first three may look familiar. Everybody should have those. But the last three are especially important for parents who have children with special needs.
A letter of intent is a document filled with important information about the special needs child. Everything from their primary care physicians to their favorite foods should be documented in this letter. It’s also a place for you to spell out what you want to have happen after you die, and it is a guide for the child’s new caretaker. It’s important for any parent to pick a guardian for their children in case they pass away, but it’s especially important for parents of children with disabilities. Those with special needs may require a caretaker well into adulthood, and planning for this to make sure your child is in the right hands is critical. Overstreet recommended frequently reviewing guardianship plans. Situations change, and it’s important that your plans are up to date.
Finally, when preparing for retirement, parents of children with special needs should set up a special needs trust. This allows you to ensure the child is financially secure without jeopardizing their entitlement to public assistance. Without a special needs trust, the child risks becoming a ward of the state. You may feel overwhelmed by the financial obligations you should anticipate for you and your kids. The good news is that a financial planner like New Millennium can help you draft these important documents and advise you about making your child with special needs part of your retirement plan.