How to plan for retirement when you have a child with autism or special needs


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Having a child with autism adds a layer of costs for parents planning for their own retirement.

On average, a person older than 18 who has a disorder on the autism spectrum will face annual related costs that are greater than $50,000, even without a debilitating intellectual disability. Those with a more serious autistic disorder can incur annual costs of about $88,000 per year, according to a study by the American Medical Association.

Nobody knows that better than Mitch Tuchman, managing director at Rebalance IRA, a retirement investment firm, and father of Jack Tuchman, a 19-year-old with Pitt Hopkins Syndrome, an autism spectrum disorder that has left Jack with the mind and abilities of a 1-year-old.

“The big thing on our minds and the minds of other parents with a disabled child: When we are unable to physically take care of our child or when we are 6 feet under, how is it going to work?” Tuchman says.

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Parents worry about future risks

Some of the financial issues that parents of autistic children face are the same as those faced by parents of children with other kinds of disabilities. But some are unique, according to Adam Beck, assistant professor of health insurance and the director of the MassMutual Center for Special Needs at The American College.

Even among people with autism who appear to be high functioning, there is a “high risk of gradually becoming unable to work,” says Beck. “How do you plan for the possibility that you’d become unable to work in your 30s or 40s?” he asks.

One in 68 children has autism disorders, according to the U.S. Centers for Disease Control and Prevention. If you have a child with such special needs, here’s advice about ways to approach planning for retirement when autism is part of the picture.

Start by getting a solid diagnosis. Autism disorders can be difficult to diagnose, but it is important for a child to have an authoritative one. Tuchman found that it can be a challenge — and a significant expense — to get the right diagnosis. “Genetic testing is like black magic. It seems like we’re still in the dark ages,” he says. But getting a diagnosis nailed down can mean the person may qualify for treatment and other benefits throughout his or her life — long after parents aren’t around to help.

Getting a diagnosis nailed down can mean the person may qualify for treatment and other benefits throughout his or her life.

Evaluate your child’s unique situation. Children with Asperger’s syndrome, a high-functioning end of the autism spectrum, may not need help making a living, Beck says. But it still might make sense to set up a plan for that child that differs from the one you make for another child without the disorder. Putting an individual with autism in a position where they manage money could be a mistake. “Someone with a business might decide to give one child an ownership stake, while giving the child with autism something else,” Beck says.

Consider a special needs trust. Those who might need government support such as Social Security Disability Insurance or Medicaid-paid health care must have limited income and assets to avoid disqualifying themselves. A special needs trust can be used to pay for things that government programs don’t provide, such as clothing, companion care, legal fees, transportation, taxes and repayment of debts that the recipient might have inadvertently racked up, Beck says. Parents, grandparents and other family members, or a professional, can serve as the trustee. But the job of setting up the trust really requires a professional who understands the complexities, says Beck, who is also an attorney.

Add training wheels to mom and dad’s support. Beck says providing a monthly allowance with no constraints can be an expensive mistake. He advises that parents figure out ways to limit how the money is used. He points to credit cards with limits like those from True Link Financial as a way to provide independence and retain some control. For instance, a parent or guardian can say the user of the card can charge $1,000 a month, but $600 of it has to go for rent, $300 can be spent at the grocery on things other than alcohol and $100 can go for gas. “Many of our customers have autistic children,” says True Link CEO Kai Stinchcombe. “We also work with special needs trusts. There are complex rules around eligibility, and we help people with compliance.”

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Try to make employment practical. Plan to do what you can to ensure that your child can earn a living. Some forms of autism don’t prevent people from making a good living, but the nonprofit Advancing Futures for Adults with Autism, or AFAA, maintains that 90% of adults with autism are unemployed or underemployed. Both Beck and this organization urge parents to consider providing training, or guiding their offspring toward alternatives to traditional employment that might improve their children’s financial prospects. For instance, an artistic talent could be turned into a viable small business.

Explore annuities and life insurance. Even if the autistic adult in your family isn’t likely to qualify for government help, his life might be improved by an annuity that kicks in as he approaches retirement or life insurance after you’re not around, suggests Somerset Wealth Strategies Adviser David Smith. But he warns shoppers to be careful. “Understand the contract specifics — how the money will come out and how it will benefit the recipient. You don’t want to send them to Vegas,” he says.

Set up a social support network. One symptom of autism is difficulty making and maintaining social connections. Through a special needs trust or other arrangement, a parent can provide money or other incentives to make sure that an autistic child is included in family celebrations and can take vacations. “It’s hard to put this in your will, but I think it is important that parents set up a social network, making sure that their child is going to have friends and family when they are gone. It will make a big difference in their lives,” Beck says.

Put on your own oxygen mask first. “A special-needs family can easily drain all of its savings,” Smith says. “You are going to be 20+ years older than the child, and the worst thing is getting to the point where you are too old to care for your child and you don’t have enough money to pay someone else to care for him.”