1 in 5 Americans — an estimated 56.7 million people — will be affected by a special need or disability in their lifetime.1 Without assistance from government programs, non-profit organizations or employers, caregivers often face a tough and confusing journey — especially when it comes to planning for retirement and a lifetime of continuous care for their loved one with special needs.

The good news is medical and technological advancements continually improve diagnosis and treatment, and many with special needs are enjoying longer, fuller lives than in the recent past. For instance, the life expectancy of someone with Down syndrome has increased from 25 in 1983 to 60 today.2 Even so, the costs associated with caring for someone with special needs can be emotionally, physically and financially draining.

Lifetime costs cause growing concerns

In most instances, the caregiver will be responsible for the majority of their loved one’s medical and related costs. These lifetime costs can range depending on the condition, but can be substantial. According to Autism Speaks, the cost of caring for a person with autism typically ranges from $1.4 million to as much as $2.4 million during that person’s lifetime.

By 2025, Autism’s cost in the U.S., including treatment and lost productivity, will be $461 billion annually — equivalent to 1 percent of the U.S. gross domestic product — according to a 2015 study by researchers at the University of California-Davis and the University of Denver. Very often, families carry most of the burden of paying for that care.

Caregivers may also experience more health and emotional problems as well as take more time off from work. For many, caring for a loved one with special needs can be financially straining and may deter from the proactive planning necessary to prepare for the future they envision.

Navigating the maze of government assistance

Government programs are designed to provide financial support to the family, but the rules are often confusing and disproportionate to costs. For example, a caregiver’s income and assets may rule out or reduce the amount of Supplemental Security Income (SSI) available for their love one with special needs under the age of 18.

After turning 18, their assets cannot exceed $2,000, and their monthly earnings cannot typically exceed the monthly SSI benefit ($735 for an individual in 2017). Due to these complexities, many caregivers have substantial gaps within their overall planning strategy, especially for long-term services.  

Median Annual Care Costs, by Type of Service, 2015: $91,250 (Nursing Facility), $45,760 (Home Health Aide), $17,940 (Adult Day Health Care). 100% federal poverty level for a family/household of three in 2015 was $20,090.

Ways to fill in the financial gaps of special needs planning

When planning for a loved one with special needs, it’s important to fill gaps of coverage without affecting government benefits. A few effective options for caregivers include: 

  • Working with a special needs financial professional who specializes in special needs planning. 
  • Enrolling in accident insurance coverage that can limit out-of-pocket expenses in the event of a debilitating accident. 
  • Using Special Needs Trusts (SNTs) for cash, investments, life insurance proceeds, and other assets that may prevent jeopardizing government benefits. Assets held in these trusts are not counted toward eligibility. 
  • Considering the titling of assets and how those assets are left for beneficiaries. 
  • Learning about The Achieving a Better Life Experience (ABLE) Act that was passed to create an additional savings opportunity for people with special needs and disabilities. ABLE allows those with disabilities or a legal representative to establish tax-advantaged savings accounts of up to $100,000 without affecting SSI. If SSI is not an issue, limits are generally expanded to between $250,000 and $350,000. 
  • Creating the proper documentation so that caregivers can legalize their vision of future care. 

Whether you’ve already started planning or are unsure where to begin, a specially trained financial professional can help guide you with education and resources to help you plan for the future you envision.Learn more about the challenges facing people with special needs and their caregivers by reading our latest white paper (Download PDF).  

This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. We recommend that you consult an independent legal advisor or financial professional for specific advice about your individual situation.

1 Source: U.S. Census Bureau. “Americans with Disabilities: 20102 National Down Syndrome Society (opens new window) website.