How to Plan Retirement When You Have Child with Special Needs?

What comes to your mind first when you think of retirement? Probably you and your partner are sitting near a beach enjoying your retirement years. Though this is a dream for every retiree the reality has a different take.  You may not retire at the right age or you may be able to retire early. Much depend on how you plan for your retirement and when.

Retirement With Special Needs

Include Your Special Needs Child In The Dream Above

For special needs children parents, retirement planning has to involve three people- The first person, his/her partner and the special needs child. In traditional planning, parents plan for their children until they move out of the house which is like in the 20s. But that’s not the case with special needs children family. The child may not be able to live independently and so his/her lifetime has to be planned.

Though retirement planning is important there is no easy answer to the questions. Much depends on a family situation. There may be a sibling around to help or may not be. The resources may or may not be enough,  how facilities in the living city are and many others. However, it’s advisable that retirement planning should be given utmost consideration as in these years you don’t have much of option if you are not prepared well.

Here are a few points to consider for a special needs child family to plan for their retirement:

  1. Identifying the Requirement

Planning for retirement years means knowing about your financial requirement. There will be three people whose financial requirement needs to be planned. We all know what longevity risk is – Living longer than you have planned. Here along with the parent’s longevity risk, the special needs child longevity risk will have to be addressed. For this, the retirement nest egg needs to be created. This retirement corpus has to include the special needs child corpus for those golden years of life. Once this requirement is identified parents will be able to analyze whether any changes have to be made in their lifestyle, to allow more savings for retirement accumulation.

  1. Identifying Support at Retirement

Retirement planning eases out when you have a good support system in your golden years. But it may not be with every family. You may have a sibling who may support in financial and decision making in the later years of life. So the retirement planning has to inculcate planning for the sibling, the special needs child and the parents themselves.  But in many family situations in India siblings are settling abroad and thus the option is less reliable. Then parents have to identify support in near and dear ones to bridge this gap. Friends and relatives play an important role in providing a good support system in the later years of life.

  1. The Retirement Living Probabilities

When there is a special needs child then expenses in retirement years are higher. Sometimes it may not be feasible for a family to live on such high expenses in cities like metro.  Though there is an option of downsizing lifestyle it again has its limitations in bigger cities. Then a family has to look at relocating to smaller cities. But it’s easier said than done. If the decision comes instantly and you have not planned the new location might not give the right option. There may not be good facilities and the special needs child may not be able to adjust. Though there is an option of stretching the retirement years it may be disappointing if forced rather than planned.

  1. Start Investing

Retirement is a long journey and with special needs child family needs are higher.  But the resources are limited. Unless retirement is planned early the going can be tough. Any wealth accumulation takes time and no short cuts are available when you have to create wealth. Hence parents should start investing for retirement at an early age.

Ideally just after few years when child disability is known the investment for retirement should also start. Even if you have missed out for a few years the investment should start today. If you leave it to the retirement years then finding options is going to be difficult.  The asset classes have to be appropriate since you need a higher return to accumulate more. Equities, EPF, NPS, Superannuation and more – all such options have to be analyzed and maximized to ensure you can accumulate more corpus for retirement. How much you invest in each is ones risk appetite and so should be well planned.

Retirement planning needs time. In normal circumstances, even retirement planning for self is not considered so seriously and so many tend to delay it. But with a special needs child, the impact of delay can be catastrophic as two generations are involved. If planned ahead and with proper tools, the experience can be pleasant and rewarding for all the individuals involved in childcare.

About the Author

Jitendra P.S. Solanki

Jitendra is a SEBI Registered Investment Adviser (INA10000184) and has earned the much-respected professional designation of Certified Financial Planner (CFPCM ) and Chartered Trust & Estate Planner (CTEPTM). He is a post graduate from IIT - Roorkee and has spent 15 years in Financial Services Industry working with leading financial institutions & Banks, advising families on their Financial well-being. Jitendra specializes in advising families with special needs children on various financial & legal aspects.

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