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I want to retire in two years, my wife and I have saved 3 million but we are worried about our son with special needs – what can we do?


I am about 60, my wife is 57, and I want to retire at 62. Currently, I’m earning about $ 125,000 to $ 150,000 a year, which supports my family. My wife has stopped working Age 43 To raise our child, who is now about 18 and has moderate-to-severe autism. I have No. Loan and three homeowners. I live in one, a vacancy (inheritance) and a rent. I pay a mortgage on the house I live in ($ 1,350) A Per month, only 20 payments are due) and the other two have been paid. Collectively, their value in the market is estimated at 2.6 million. I’m planning to rent an empty house but I’m not sure when it’s a little emotional for me because my parents lived there until they left too long ago. Once rented, both rents will bring in $ 6,000 per month. Apart from the houses, I have 1 2.2 million in 401 (k), my wife has $ 600,000, we have savings of $ 150,000, and I have $ 100,000 in my brokerage account. I do not plan to apply for Social Security until I retire at the age of 66. I will apply for Medicare at age 65 as my wife and I are both in average health.

My main concern is my son, he needs full-time care and he will never be able to support or survive on his own. She has resources available, such as a regional center, Medi-Cal, in-home support services and government funding, which contribute to her life away from her parents when we retire. I don’t want to worry about my son’s happiness and well-being in a state system, so I planned to contribute to his other resources so that he could survive in the best possible care and ensure my best that he would. Taking care and being happy when we are not around. I plan to contribute about $ 100,000 a year on top of the other resources mentioned earlier, which is close to another $ 100,000 a year. Is that enough?

I want to maintain or improve my lifestyle when we retire. Do you think this is possible for our retirement and my son’s future?

Thanks,

And

Views: How to plan your retirement if you have children with special needs

Dear R,

It’s great to see how much you’ve saved for yourself and your wife’s future, and how well you plan for your son – thank you.

You’re asking really important questions, and so are many other families. Retirement planning and special needs planning go hand in hand, especially for parents who are concerned about the well-being of their children during and after their own lifetime. You need to keep a fine balance in caring for your children, but do not put yourself at risk of running out of time to retire.

You and your wife have collected a truly amazing nest egg – over $ 3 million in immovable property, and then an estimated $ 2.6 million in three houses, as you say. To many, it may seem like you are ready to spend your life and take care of your son. Even if you have a financial way to help, consider carefully how you will do it.

For example, based on the assets you have given and assuming you and your spouse live to be 92 years old, the 3 million you have invested will be enough, says Eric Bond, a financial adviser at Bond Wealth Management. But where will that ,000 100,000 a year come from? Most likely, it will be from your retirement account because your savings and brokerage accounts are not large enough to support that withdrawal rate. “Make sure you don’t deplete your savings and sacrifice your own financial security,” Bond said. You need to set aside an emergency account for any unforeseen circumstances, especially when maintaining two rental houses.

I’m going to offer some resources for special needs plans in a moment, but I want to resolve your retirement plans really quickly first. You mentioned that you want to have an “advanced” lifestyle in your spare time. I’m not entirely sure what that means, but be sure to leave before leaving. Try to estimate what your monthly expenses will be for this new lifestyle and then determine where you plan to make money from, Bond said. “Longevity and then the length of your retirement will also be a factor here – if your retirement lasts 20, 30 or even 40 years, do you risk reducing your savings by leading a better life in the first years of retirement?”

This is not to say that you shouldn’t splurge a little. After both of you have worked so hard, both at home and abroad, you should both enjoy your leisure years – mapping out how you plan to pay for it at the top of your goals to help your son with $ 100,000 a year.

Want more effective tips for your leisure savings journey? Read Marketwatch “Retirement Hacks” Columns

Estimate your budget as wide as possible. Such as: healthcare. You may have to take care of your son with the various resources you have mentioned, but will you pay for personal insurance until you qualify for Medicare? This can be quite expensive, so budget for your healthcare expenses before you retire.

For your Social Security benefits, think carefully about when you claim them. You mentioned starting at your full retirement age, which is certainly better than claiming early when you can afford it, but you may want to delay further. The longer you wait to claim your FRA and your benefits up to 70, the more you will get in those paychecks when the time comes. Conduct situations using your age and your wife’s age, who will benefit from it based on you if you advance her.

One strategy is for your wife to start collecting her benefits in her FRA so that your son can collect half of it. Then, when you turn 70, he will start collecting your benefits, says Alexandria Dan, a certified financial planner and asset adviser at Affinia Financial Group. (Children are eligible to claim up to half of a parent’s full retirement benefits before the age of 18 if they have a disability that begins before the age of 22, and for the benefit of survival, they can receive up to 75% of the deceased parent’s basic social security benefits, according to Social security authorities)

I often advise people to contact a financial planner who can look closely at minute details and financial statements and create an action plan based on their needs and goals. I’m going to give you that advice! Being a professional can really pay off, because he or she will be able to better determine how you can reduce your retirement savings in a meaningful yet efficient and tax-efficient way.

If you go this route, look for an advisor who specializes in special needs planning, as they will know the many rules and options available. Here are two additional resources for you: Cynthia Haddad, a Certified Financial Planner, Partner and Resource Advisor at the Academy of Special Needs Planners and the Special Needs Alliance, Affinia Financial Group. These agencies can help you find mentors and attorneys. Haddad and his colleague John Nadworny recently wrote the second edition of their book, “The Special Needs Planning Guide: How to Prepare for Every Stage of Your Child’s Life,” published by Brookes Publishing and will be published next month.

Bond also recommends working with a family attorney who can help you build trust in a particular need, if it is right for you. “Many people have made the mistake of naming disabled family members as beneficiaries of their wishes, and in the case of leaving property to them, people with disabilities may lose eligibility for government assistance programs,” Bond said. “It is possible that a special needs trust is a good option because it will allow you to pay for expenses that may improve your son’s standard of living. Government monthly income or other services that may be the main running source of their support.”

This idea is important. You probably want to protect your son’s ability to benefit, as well as contribute to his well-being.

See also: The epidemic has made everything difficult: financial strategies for people with disabilities and special needs

There are two main types of special needs trusts: one is the first-party trust, which will be in your son’s name, and the second – and the more common option – is the third-party trust, where anyone can pay for the beneficiary and after the person dies, the donors Other named beneficiaries will get the remaining money. However, make sure that your son is the beneficiary of any of your accounts, it is his belief that has really been named as the beneficiary, so that he is eligible for various benefits, Dawn said.

As for his or her caregiver, remember what you want now and in the future. States have different rules in this regard, but some allow one parent to be a guardian and another to act as a caregiver and receive a Medicaid stipend. Check with your state if this is an option. As sick as it may seem, think very carefully about who you want to be for your son if you and your wife are not there. Who are the main people in your life? And can they take on roles and responsibilities or will they? You must talk to them about it before you make it formal.

Guardianship can be quite limited, and Britney Spears had a bad reputation, especially of late, due to her 14-year long preservation. But in situations where the individual is unable to make his or her own decisions, that may be the only way, Dawn said. Limited guardianship is available, such as for healthcare or financial matters only, but an attorney can help you determine the best course for you, your son, and your family.

Better a poor horse than no horse at all. You may even ask for the name of a co-guardian, who can step down if the current parent dies.

“Guardianship is court-appointed,” Dawn said. “When a parent dies, a new person has to go through the whole process that the parents did.”

As the saying goes, flight attendants remind us that whenever we’re on a plane, you have to put on your own air mask before helping anyone else. This is also true in your situation. Find out how much money you will need in retirement, estimate your expenses in this next chapter and get a handle on your expenses. Then you will know where you stand and how you can help your son.

“We always start: take care of mom and dad first,” Haddad said.

Reader: Do you have any suggestions for D? Add them in the comments below.

Have a question about your own leisure savings? Email us HelpMeRetire@marketwatch.com



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