Caregivers: Take Care Financially for Your Own Sake

Caregivers: Take Care – Financially – for Your Own Sake

Are you caring for a family member with special needs? Do you worry about stretching your resources to meet both current and future expenses? If you’re a caregiver, you should be asking yourself if you have planned for your own financial well-being as well as that of your loved one. Will you have enough money saved for retirement, or will you have to cut into funds you intended for your child or spouse who has special needs? If a separate strategy for you is in place, has it been evaluated from the special needs point of view?

Set Goals, Find Revenue, Choose Solutions Most caregivers know they need to do something. But some may not have fully accepted that their child may need a plan to address their future financial needs.. Conversely, some may be so strongly focused on the special needs aspect, they don’t think to include or maintain a strategy for their own financial future. A financial services professional with experience in the special needs area can help such families pull it all together so all family members benefit. An experienced financial professional will help you design a road map—and explain how your road map can help you reach your goals. If you don’t have the revenue to make the plan work, an experienced financial services professional may help find ways to create the revenue needed.

Finding revenue means helping clients analyze their cash flow. Not everyone does this! Many people are unsure of where they’ve spent $300 to $500 a month. For most people, analyzing how they spend money and changing their spending habits is a big step in the right direction. It may mean, for example, not going to the vending machines every day at work, or bringing lunch from home, to come up with the money needed to pay the premium on a life insurance policy. (Not grabbing that cup of coffee and bag of chips every day could save you $600 in a year!) Or it may mean rearranging debt by, for example, shopping around for a better deal on auto insurance or changing the withholding status on a paycheck.

Another step in the right direction is to set financial goals and to think of insurance and other financial products not merely as products, but as solutions to financial concerns and problems. First, design your strategy, than determine what’s needed to implement it. Is your goal to have a fixed income no matter how long you live? An annuity guarantees you will not outlive your income. Do you want to create an instant estate? Life insurance is one solution. A long term care policy helps prepare for potential high costs associated with unforeseen long term care needs. Disability income insurance helps cover lost income should you become disabled and unable to work. Put your goals first, then work with your financial services professional to select solutions (that is, products) that will help get you there. Evaluate Your Current Strategy You may have a financial strategy that was created prior to your having a family member with a special need. Or you might have only what you get as employee benefits: a life insurance policy, a 401(k) plan, or a disability income insurance policy. It’s important to take a look at what you have.

A generic financial strategy isn’t enough. The special needs aspect must be addressed properly, along with any general estate planning or financial strategy measures. Otherwise, the individual components of a strategy may conflict, cancel one another out, or do harm where good was intended. For example, naming “all lawful children” as beneficiaries of a life insurance policy may be a mistake. An inheritance could jeopardize a special needs child’s eligibility to receive federal benefits. An attorney experienced in special needs can help set up a trust instead to which funds can be directed.

Here's another strategy: a product generating a predictable income for parents throughout their lifetime might also pay the premium on a second-to-die life insurance policy. When the second parent dies, the proceeds of the policy will be placed in a special needs trust for the child's benefit. The result: current and future benefits for all family members.

Take Care of Yourself What are your family’s financial goals? What does your family’s financial strategy look like? If you’ve designed it with every family member’s goals in mind, including your own, then you’re on the right road. If not, take some time from your busy life to put a strategy in place. With the right road map in your pocket, you’ll have one less thing to worry about.

The information provided is not written or intended as specific tax or legal advice and may not be relied on for the purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

(1)The Chartered Special Needs Consultant (ChSNC®) - a professional designation awarded to those individuals who've completed 120 hours of academic classes in addition to holding either Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC) or Certified Financial Planner (CFP) designations and previously completing the Special Care Planner certification program. The ChSNC designation was developed by The American College in Bryn Mawr, Pennsylvania. The certification program and the professional designation evolved from MassMutual's SpecialCare(SM) Program.

(2)“Local sales agencies are not subsidiaries of MassMutual or its affiliated companies.”

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