Fill the Gaps of Special Needs Financial Planning

Help your clients navigate the added costs and complex benefits of special needs care

Oct 16, 2017 @ 12:01 am

By Tom Halloran, President, Voya Financial Advisors

Across the United States, one in five children and adults — 65 million people — will experience a special need or disability during their lifetimes.1 Without assistance from government programs, non-profit organizations or employers, caregivers often face a tough and confusing journey — especially when it comes to planning for retirement and a lifetime of continuous care for their loved one with special needs.

The good news is medical and technological advancements continually improve diagnosis and treatment, and many with special needs are enjoying longer, fuller lives than in the recent past. For instance, the life expectancy of someone with Down syndrome has increased from 25 in 1983 to 60 today.2 Even so, the costs associated with caring for someone with special needs can be emotionally, physically and financially draining.

Lifetime costs cause growing concerns

In most instances, the caregiver will be responsible for the majority of their loved one's medical and related costs. These lifetime costs can range depending on the condition, but can be substantial. According to Autism Speaks, the cost of caring for a person with autism typically ranges from $1.4 million to as much as $2.4 million during that person's lifetime.

By 2025, Autism's cost in the U.S., including treatment and lost productivity, will be $461 billion annually — equivalent to 1 percent of the U.S. gross domestic product — according to a 2015 study by researchers at the University of California-Davis and the University of Denver. Very often, families carry most of the burden of paying for that care.

Caregivers may also experience more health and emotional problems as well as take more time off from work. For many, caring for a loved one with special needs can be financially straining and may deter from the proactive planning necessary to prepare for the future they envision.

Navigating the maze of government assistance

Government programs are designed to provide financial support to the family, but the rules are often confusing and disproportionate to costs. For example, a caregiver's income and assets may rule out or reduce the amount of Supplemental Security Income (SSI) available for their love one with special needs under the age of 18.

After turning 18, their assets cannot exceed $2,000 and their monthly income generally cannot exceed the Substantial Gainful Activity income limits. This amount is currently $1,170, and it increases annually. Due to these complexities, many caregivers have substantial gaps within their overall planning strategy, especially for long-term services.

When working with clients impacted by special needs, it's important to help them fill gaps of coverage without affecting government benefits. A few of the most effective options for caregivers include:

  1. Working with a financial advisor who specializes in special needs planning.
  2. Enrolling in accident insurance coverage can limit out-of-pocket expenses in the event of a debilitating accident.
  3. Using Special Needs Trusts (SNTs) for cash, investments, life insurance proceeds, and other assets can prevent jeopardizing government benefits and preserve the beneficiary's eligibility for needs-based government benefits such as Medicaid and Supplemental Security Income (SSI). Assets held in these trusts are not counted toward eligibility.
  4. Caregivers should carefully consider the titling of assets and how those assets are left for beneficiaries.
  5. The Achieving a Better Life Experience (ABLE) Act was passed to create an additional savings opportunity for people with special needs and disabilities. ABLE allows those with disabilities or a legal representative to establish tax-advantaged savings accounts of up to $100,000 without affecting SSI. If SSI is not an issue, limits can go as high as $500,000 in some states (limits are typically aligned with the maximum 529 college savings plan state limits).
  6. Caregivers should build a legal strategy that captures their vision of future care through proper documentation.

Through taking into account these financial planning gaps, you can help guide your clients with education and resources to help them plan for the future they envision.

Serving the special needs community is a natural extension of Voya's vision to become America's Retirement Company ®. Voya CaresTM provides personalized financial and retirement planning solutions to help clients plan for the retirement future they envision and create a lifetime of continuous care for their loved one with special needs. For advisors, Voya Cares presents a unique opportunity to grow and differentiate your business through special needs financial planning. Through Voya Financial Advisors, a group of advisors who are a part of Voya Cares provide financial wellness solutions focused on the unique challenges faced by people within the community. Voya Cares helps advisors gain proficiency in special needs planning through training, educational resources and support.

1 U.S. Census Bureau data and respondents' self-identification

2 National Down Syndrome Society website:

Current video link for quick reference

Don't procrastinate with special needs planning

Additional Content:

  1. Special needs planning checklist
  2. Roadmap to government benefits for special needs financial planning
  3. Case study: Special considerations for beneficiary designations

About the Author

Ways to fill in the financial gaps

Tom Halloran is president of Voya Financial Advisors, an industry-leading registered broker-dealer. With approximately 2,100 registered representatives across the country, Voya Financial Advisors offers education, financial planning and a broad range of personalized asset accumulation, protection and distribution solutions with a focus on helping advance the retirement readiness and financial security needs of Americans.

Halloran has over 29 years of experience working with financial advisors in various marketing and sales leadership roles. Prior to joining the company, Halloran most recently served as managing director at Bank of America Merrill Lynch, where he developed advisory solutions for the mass affluent customer segment. Previously, Halloran held positions of increasing responsibility at Putnam Investments.


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