Financial planning for your special needs child
Raising a child is a journey filled with love and joy but also worry. If you’re a parent of a child with special needs, that anxiety is heightened by financial fear and uncertainty. With roughly 19 million children in the United States having special health care needs, you’re far from alone on this journey.1 Still, the path can feel overwhelming, especially when it comes to money and planning for the future.
When you’re busy managing daily routines and challenges, it’s easy to put long-term planning on the back burner. Getting a handle on your finances now can free you up to focus on what matters most: your family’s well-being and your child’s happiness.
The impact on mind, body, and wallet®
Caring for a child with special needs impacts every part of your family’s finances. You’d do anything to provide the care your child needs, but that often requires making tough choices: cutting back on hours, turning down promotions, or even leaving a job. For many caregivers, these sacrifices can have a high cost — and not just in terms of their bank account. Forty-three percent of caregivers rate their financial health as fair to poor, 38% report difficulties in maintaining work/life balance, and 41% say they have mental health challenges.2
Moving toward financial confidence
Government programs like Supplemental Security Income (SSI) overseen by the Social Security Administration (SSA) can help offset the cost of specialists, therapies, medical devices, and adaptive equipment, among other costs. Yet only about 7 in 10 children likely eligible for SSI are currently enrolled.3 Eligibility depends on whether your child meets the Social Security Administration’s definition of disability as well as your family’s income and assets. If your family’s assets are too high, there are steps you can take to help you get under the threshold.
Families struggling with the cost of health care may be able to get help from Medicaid, which often covers services that private insurance doesn’t — like long-term care, home care, and cost-sharing protections that keep medical expenses manageable. Needs-based programs like Medicaid have a countable assets limit that varies by state. That means, in most states, you and your child must have less than $2,000 in countable assets.4 But in some states, like Connecticut, the limit may be even lower.5 In most states, if your child qualifies for SSI, they automatically qualify for Medicaid. If your child is ineligible for SSI benefits, they may still be eligible for Medicaid or state-specific waivers that provide extra services not covered by standard insurance. These waivers let states adjust the usual rules, like income limits, to provide home- and community-based services tailored to families’ unique needs.
Helpful financial tools
Luckily, there are some tools to help you save for your child’s future and protect their access to government benefits.
- An ABLE (Achieving a Better Life Experience) account is a special savings account for disability-related expenses that grows tax-free. The money in it (up to $100,000) doesn’t count against SSI or Medicaid eligibility. There are annual contribution limits — in 2026 a total of $20,000 from all sources combine/d can be deposited into an ABLE account.6
- Special Needs Trusts allow assets to be set aside for your child’s care without affecting their ability to access government benefits. Depending on the type of trust, it can be funded with proceeds from a personal injury or medical malpractice settlement or money from savings, life insurance, or inheritance, as a few examples. Trusts can be named as beneficiaries on life insurance policies, which makes it easier to pass along an inheritance or life insurance money directly for your child’s benefit. The rules around trusts are complex. You’ll need to consult with a special needs/elder law attorney to set one up.
My role as financial advisor
For every parent, having confidence that you’ve done everything you can to help protect your child’s financial future is often crucial. For parents of children with special needs, it can also be very complex. I can help you navigate the ins and outs of government programs, trusts, and other considerations.
Embracing the journey ahead
Mapping out your financial future isn’t an unreachable goal. The earlier you start thinking about your goals and making a plan, the more options you’ll have, the more confident you’ll feel about what lies ahead, which will give you more time to focus on the moments that matter with your child.
Disclaimer:
1 Elizabeth Williams, 5 Key Facts About Children with Special Health Care Needs and Medicaid, KFF, April 18, 2025
https://www.kff.org/medicaid/5-key-facts-about-children-with-special-health-care-needs-and-medicaid/
2 From Workforce to “Careforce”, Guardian, 2025
https://www.guardianlife.com/reports/caregiving-in-america
3 Kimberly Blanton, Up to 480,000 More Children Might be Eligible for SSI, Center for Retirement Research at Boston College, November 21, 2024
https://crr.bc.edu/up-to-480000-more-children-might-be-eligible-for-ssi/
4 Utilizing the Spend Down Option to Maintain SSI and/or Medicaid Eligibility, Special Needs Alliance
https://www.specialneedsalliance.org/the-voice/utilizing-the-spend-down-option-to-maintain-ssi-andor-medicaid-eligibility-2/
5 Medicaid, CT Healthcare Explained, July 2025
https://www.cthealthexplained.org/medicaid/
6 Spotlight on Achieving a Better Life Experience (ABLE) Accounts, Social Security Administration, 2025
https://www.cbpp.org/research/social-security/low-income-disabled-youth-face-significant-challenges-upon-coming-of-age
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
“Financial advisor” / “advisor” is used generally to describe insurance/annuity and investment sales and advisory professionals who may hold varied licensing as insurance agents, registered representatives of broker-dealers, and investment advisory representatives (IAR) of registered investment advisors, respectively. Only those representatives who use advisor in their title or otherwise disclose their status and meet the necessary licensing or registration requirements provide investment advisory services
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