Whether you’re a person with a disability transitioning to independent living or a parent or guardian working to secure your child’s future, financial planning is crucial. Understanding the resources available to people with disabilities and their families can help you set yourself or your loved one up for a lifetime of financial stability. Read on to learn more about the top tips and resources to help you create a financial plan that fits your lifestyle and needs.
Understand Your Expenses and Income
The first place to start with financial planning is understanding what you currently spend. Include medical costs, housing, food, clothing, transportation, and other aspects of daily life, plus any future educational expenses and estimated cost increases for inflation. A worksheet like this one can simplify the process of identifying and outlining your expenses. After that step is done, you can also document your various sources of income to create a full financial picture.
Ensure You Are Receiving Applicable Benefits—and Understand How They Evolve
If you are caring for a child with a disability, chances are, once they turn 18 or 26 the benefits available to them will change. This may leave you or your loved one with greater expenses to consider, or additional restrictions on their income or assets. Resources like this handbook from the Social Security Administration can provide an overview of available benefits and tools like the Benefits Check-Up website can help you ensure you are receiving all applicable benefits for your current financial situation. Additionally, service providers like your local Center for Independent Living can help you understand benefit changes impacting your unique scenario.
Explore Savings Options
Two popular choices for establishing savings funds are Achieving a Better Life Experience (ABLE) accounts and Special Needs Trusts. ABLE accounts are tax-free savings accounts for people with certain disabilities. Learn about ABLE accounts here or create one through the State of Michigan here. Special Needs Trusts are a more complex way of leaving money to a loved one with disabilities. This article provides a basic overview of Special Needs Trusts and how to create one, and the Special Needs Alliance provides a more comprehensive guide to assist people with creating and administering these types of trusts. Your unique financial situation and the nature of your loved one’s disabilities will influence the savings method you choose, and this questionnaire can help you consider the benefits of each.
Consult with a Professional
It’s important to understand your options and have a solid foundation of financial knowledge. Yet, when it comes to making decisions about assets that may impact state and federal benefits, running your plan by a professional before you implement it is a vital step. Your local Center for Independent Living can connect you with legal aid and financial planning resources within your community, and national organizations like the Special Needs Alliance provide legal and financial support centered on people with disabilities and their families.
Considering the future financial security of a person with disabilities is key to supporting successful independent living, and while it can be complicated, help is available. Use the resources above to develop a fundamental understanding of disability-related financial management. Then, connect with your local Center for Independent Living for courses, consulting, and referrals to create a financial plan that works for your family!