The Year in Special Needs Planning

Planning for the future is a process; there are many choices and options to learn about, think through, discuss and act upon.  Each month we will highlight a specific element of planning, along with a few possible action items, to help make the process more manageable.

The important thing is to get started!

January – Set Yourself Up

1. Set and prioritize your financial goals. A good way to begin might be to make a comprehensive list of goals and then rank them by urgency and achievability. 

               Here’s a hypothetical example:

2. Review your past year’s cash flow and construct your spending and saving plan.

   • Review 2019 cash flow

     1. Here’s why- It's a reality check; you’ve just listed what you want to do now look at what you did do. How in the world did you spend all that money at Target? Reviewing where and what you spent your money on is a great way to bring mindfulness to your spending.

     2. Here’s how- Most banks give account holders the ability to download their transactions and may even categorize the expenditures for you. Determine what was spent on filling needs- e.g. food, shelter, insurance, transportation and what was spent on discretionary items or wants - travel and entertainment, streaming services, the gym, restaurants- the things you choose to spend your money on but can keep calm and carry on without.

   • Build a spending & saving plan.

     1. A spending plan is a summary of how you project spending your money and provides a benchmark to check your actual spending against throughout the year. A general rule of thumb for making a spending & saving plan, also called a budget, is to aim for spending 50% of your after-tax income to pay for your needs, 30% to pay for your wants and 20% to pay yourself – your savings! We prefer to elevate the focus on saving and tweak this practice to be a 50/20/30 rule, when possible. This prioritizes paying yourself 20% before paying for your wants or discretionary expenses. If you know you are realistically unable to save 20% of your after- tax income, consider increasing your savings 1% per year until you get there.

     2. Be a Money Watcher. Keeping track of your money is a key action to help you stay on track and make mindful money decisions throughout the year. Just look at the decades of success subscribers to Weight Watchers have enjoyed. A key – maybe THE key- element of their program is tracking the points in what you eat against the points you are allotted in order to reach your goal weight. Without this tracking, no one will think about that extra half cookie they ate after lunch! The same is true of tracking your spending and keeping your budget and there is all manner of technology available to help you be a Money Watcher.

3. Be sure your legal and estate planning documents are up to date and your key emergency contacts know how to access them. These documents would include:

   • Power of attorney

   • Health Care proxy

   • Wills & Trusts

4. Special Needs Planning Focus

In addition to the planning documents above, for a child with a disability please include the following documents, when applicable:

• • Special Needs Trust

  • Guardians

  • Trustees

  • Advocates

  • Asset ownership

  • Beneficiary designations

And last but not least...

😍 Complete/Update a Letter of Intent. These are the details of your child’s daily life that will be an invaluable resource for those who will to carry on their care.  You may download a copy here.

You're on your way! 

This information is not intended to be a substitute for specific individualized tax or legal advice.  We suggest that you discuss your specific situation with a qualified tax or legal advisor.