How Disabled Parents Can Ensure Future Financial Security
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By Janice Russell
It’s natural for parents to worry over their children’s future. As someone with a disability, you might have unique concerns, especially when it comes to your family. By thinking through all your financial ins and outs, you can have more peace as you look ahead.
Examine retirement options
It’s important to plan ahead when it comes to retirement, and know what your options are. If your employer offers a retirement plan, your employer shoulders the bulk of the risk involved, and hires an outside resource to make plan-related decisions on your behalf. There are several versions of employer-sponsored retirement plans, such as a defined benefit retirement plan, a 401(k), a 403(b), or a 457 plan. Oftentimes your employer not only takes on the risk involved with these investments but will also match contributions to a point. These are typically solid choices.
You can also set up a retirement account without an employer involved. There are IRA accounts, SEP IRA accounts, and SIMPLE IRA accounts. It’s important to think through various factors, such as your age, rate of return, and how many years you have until retirement. Most people benefit from discussing their specific options with a financial advisor, who can examine your existing debt, savings, and income, and help you develop your best retirement solution. If you are weighing different plan options and aren’t sure if you are on track, you can use a retirement calculator tool to help tally your figures.
Understand healthcare options
Healthcare is a concern at any age, especially as an older adult. Keeping your eyes on your future choices can help you with determining changes you should make now. As an example, many people expect to rely on Medicare in their senior years, but Medicare does not provide coverage for things like dental care, prescription drugs, and vision exams. Medicare Advantage plans can help meet those needs, and you can use a plan finder to examine what is available where you live. Seniors should be keenly aware of their options, since as ElderLawAnswers points out, you must enroll in Medicare the year of your 65th birthday.
Another resource is an HSA, or Health Savings Account. NerdWallet explains you can set up your own HSA account if your employer does not provide one, and either way, those funds will stay with you throughout your future. An HSA offers certain tax advantages, and both now and in the future you can use those funds for approved health-related expenses. The more you have set aside, the more confident you can be you about meeting your own medical needs, now and down the road. HSA funds can also be used to cover healthcare expenses not met through Medicare.
Do some estate planning
There are several legal documents you should put together with your children’s future in mind. For instance, establishing guardianship creates a safety net for your kids if anything should happen to you; be sure to name both temporary and permanent guardians. This ensures your children are not caught in limbo during tragedy, put under the protection of the state while matters are sorted out.
If your children are young, a trust is another good choice. It will ensure an adult of your choosing manages financial decisions on your children’s behalf. Establishing a financial Power of Attorney might also be a good choice, in the event you become incapacitated and need another adult to step in. Along those same lines, a Healthcare Power of Attorney might be in order.
Some people have specific preferences regarding their personal end of life arrangements, and a Living Will or Advance Directive can spell those out. While these don’t protect your children financially, it’s often a relief to family members to know what your desires are in the event of a tragedy, and it removes the burden of those decisions from their shoulders.
Making a solid plan can mean peace of mind for your family’s future. Ensure you have arrangements for retirement and healthcare in place, and establish your legal documentation. A firm foundation means quality of life for you and your loved ones.
