Skip to content

Budgeting for a Special Needs loved one

Are you planning for the future of your Special Needs loved one?  Often the first question you will ask is, “how much money will they need in the future”?  The answer to that simple question is not so simple.  There is a complex array of factors that you must consider when carefully making this assessment.  Additionally, the number you come up with today may not be the same number you come up with later on down the road.  The amount required of your loved one will be a moving target as circumstances change, needs or desires change, or abilities of the individual change.  Therefore, you should do your best to plan for today, and make adjustments as often as necessary.

First, how much money does your loved one spend every month on average?  This will help you determine how much supplemental income you need to generate for them.  Second, how much income can the individual earn on their own?  Next, if government benefits are available, how much does that bring in each month or how much does that cover each month (the benefit may pay for a medical expense that is not direct income, but is an expense to consider in case the benefits go away)?  We like to plan on the conservative side and calculate the income generated both with and without government benefits.  Although these benefits can come in handy, planning for the possibility that they may not be available in the future is a good idea.  Once you know how much you need (expenses) and how much your loved can generate (income), you can determine the difference between the regular expenses and the income generated.  This difference (expense minus income) is the amount each month that a supplemental fund (Special Needs Trust) must provide for your Special Needs loved one.

Contact one of our advisors at Golden Financial Services to translate this difference into a trust fund requirement.  To make this calculation you will need the difference you came up with above, the anticipated life expectancy of your loved one, your expected rate of return, and any expected extraordinary expenses that may need to be covered from the trust fund.  After you make this determination, we can analyze your current position along with some solutions to adequately fund a Special Needs Trust. We are financial advisors that specialize in planning for a Special Needs individual and would enjoy the opportunity to sit down with you to discuss these financial concerns.

Sign up today for our FREE Bronze Membership and receive a discount on our consulting fees. Also, check out our Silver and Gold memberships and the do-it-yourself Life Plan Builder that is available exclusively for those members. The Life Plan Builder will guide you through the process of creating your own Life Plan with helpful checklists, forms, and samples. Included in the Life Plan Builder is a comprehensive financial section that will guide you through the steps to determine your own Special Needs Trust funding requirements.

Leave a Reply

Your email address will not be published. Required fields are marked *