Retirement planning when you are parent of a children with special needs

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Parents of special needs children plan for two futures

 Published: July 7, 2016 By  ElizabethO’Brien

Having a dependent loved one complicates retirement planning

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As the life expectancy of disabled adults increases, it’s increasingly complicating one issue for their aging parents: retirement planning.

Having a special-needs child adds an extra dimension to retirement planning, a complex undertaking even at its most straightforward. Parents must heed small-but-important details, such as the beneficiaries they designate on their workplace 401(k), alongside the big-picture issues: saving as much as possible for their own comfortable retirement, while ensuring that their child will be provided for, financially, physically and emotionally, after they’re gone.

“You’re planning for two lifetimes,” says Adam Beck, assistant professor of health insurance and the director of the MassMutual Center for Special Needs at the American College of Financial Services.

In 2030, there will be 1.2 million adults age 60 and older in the U.S. with developmental disabilities, nearly double the 642,000 who fit that profile in 2000, according to a 2012 paper by the Institute on Disability and Human Development, University of Illinois at Chicago. Today, people with Down syndrome have a life expectancy of 60, compared with 25 in 1983, according to the National Down Syndrome Society.

One of the most important things parents need to do is ensure that any savings and investing measures they’ve undertaken won’t jeopardize their child’s eligibility for means-tested government benefits — thus affecting the parents’ ability to save more for retirement.

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