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The cost of raising a special needs child is markedly higher than that of typical children, putting a financial strain on families.

Average Lifetime Cost of Raising Children

USDA estimates that the average cost to raise a child born in 2015 will be about 235k, however, that amount pales in comparison to what a special needs child requires.

What about my special needs child?

It costs 1.4 million dollars, to raise a child on the Autism Spectrum, and when that child also has an intellectual disability, that cost nearly doubles according to a published JAMA study.

This cost estimate takes into consideration special education, parents’ lost wages and medical expenses, including in-patient, outpatient, emergency, home health care, pharmacy and out-of-pocket costs.

State and Government Assistance

A common myth is that state and government programs cover all of the costs of special needs children. Most available programs are based upon household income. Households with two wage earners may be disqualified due to this. Non income-based programs often have years-long wait lists.

Out-of-Pocket Costs

When you’re a special needs parent, you know all too well the out-of-pocket costs, along with the impossible choices that they bring.  Turned down promotions, the inability to work full time, losing a job due to taking (too much) time off, unpaid FMLA, while costs continue:  prescription medications, pull-ups, special diets, or choosing between a promising new therapy and other siblings’ needs, making it hard to plan for the future

Planning for Adulthood

Many school-based services stop at age 21, although needs do not.

Well-meaning family members may give money or start bank accounts for your child, but in doing so can make them ineligible for government benefits.  It’s important to consult with a financial planner in order to determine what makes the most sense for your family.    Some options include:

ABLEaccount – a tax-advantaged savings accounts for individuals with disabilities and their families.  The beneficiary of the account is the account owner, and because of this, income earned by the accounts will not be taxed.

Special Needs Trust – designed to supplement, not replace, the kind of basic support provided by government programs like Medicaid and Supplemental Security Income (SSI).

Funding Options

Any money given as a gift from family members should be made to the trust. If there is not a trust, it can be deposited into an ABLE account within state guidelines.  Family members should be discouraged from making a special needs child a beneficiary of life insurance or other policies. Alternatively, they should instead make the trust the beneficiary. Another consideration is to use Survivorship life insurance policies to fund such accounts.

Summary

It costs significantly more to raise a special needs child, and planning for the future can seem daunting.  Consider consulting with a financial planner about ways to save for the future. Because they are experts, they can help to ensure that savings are available for your child’s needs without disqualification from government programs.

Want more?  Check out Been There, Tried it:  I Opened an ABLE account.

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