children and money

Are Your Retirement Savings Enough for Special Needs?

Are Your Retirement Savings Enough for Special Needs?

By Angela Wills

As time for retirement nears, Mike and Nicole Zupan have more to be concerned about than just covering themselves for the remainder of their life.

The couple will also need to allocate enough money for Josef, their 15-year-old, autistic son. The Zupans are aware that he may never be capable of living independently; therefore, their plans for retirement involve making the necessary preparations to live near him after retirement. Because there is a chance that he will live in a group home once he’s older, Mike and Nicole want to set up a special needs trust to pay for his living expenses, therapy and other costs that he may incur as an adult.

Although the Zupans have a retirement plan in place that will allow them to transition as smoothly as possible, Mrs. Zupan says that the thought of retirement has always taken a back seat to the needs of her son. She said she never really considered retirement to be an option.

The plan is that Mike, 60, will be the first to retire and Nicole, 52, will follow suit roughly five to seven years later.

Mike is a government contractor earning $120,000 annually, which is enough to cover ordinary living expenses. However, Nicole wants to return to work in order to earn the money to obtain more therapeutic sessions for their son and help to decrease their volume of debt sooner than later. The extra earnings would also go towards college tuition for their daughter and their retirement fund.

Nicole, who is a preschool teacher, is currently off work while recovering from foot surgery.

Financial experts, Sarah Halpin and John Voltaggio weighed in on what the Zupans must do to achieve their retirement goals, and here are the results of their findings.

An Inside Look

The Zupans have approximately $200,000 in home equity, $500,000 in the retirement account, $12,000 in an emergency account and about $22,000 in education plans for the children. They expect Josef will be in public school until the age of 22 due to his autism. Because it isn’t likely that he’ll attend college, they’ll need insight on the best manner to utilize his portion of savings.

The Plan

Financial advisors suggest that the Zupans continue to contribute to all accounts, but to really focus on the retirement account. They say this is the wisest option because of their plan to live close to Josef. They will have available money on hand to contribute to his needs when they arise. The advisors also added that it may be more feasible to retire later instead of sooner. This provides more time to build up those accounts and when they come off work for retirement, there won’t be much time left to be responsible for a mortgage payment. A later retirement would also set Mike up to receive his max in Social Security benefits.

Any unused retirement benefits can be willed to their estate plan, which could specify the amount that should go to a special needs trust for Josef. This type of planning would allow for a larger cushion of support for the Zupans and both their children.





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