The Most Personal Thing I’ve Ever Written
My newest book, Retire Secure for Professors, which would benefit virtually all IRA and retirement plan owners, includes what is unequivocally the most personal chapter I’ve written titled: The Three Surprising Keys to Protect Your Disabled Child’s Financial Security After You are Gone.
This chapter reveals a difficult/challenging aspect of my family’s story. For the last 15 years, anecdotes in my written communications have included personal non-business thoughts about health, travel, happiness, and other topics that I have felt comfortable sharing with you.
What I didn’t share was that our daughter has dysautonomia that will prevent her from ever being able to work or lead a life that we would typically anticipate for a smart and charming young woman.
Part of the reason I didn’t write about her disability was I wanted to wait until she was old enough to make an informed decision as to whether she was comfortable with me sharing her story publicly. Erica’s autonomic nervous system doesn’t function properly. That explains why she has many different problems. The autonomic nervous system controls your heart rate, digestion, blood pressure, breathing patterns, and multiple other bodily functions that when working properly, we don’t think about. Now she is 27 years old and has made an informed choice that allows me to talk about her disability and how we have planned for her financial future. Erica wants this information to be available for parents of children with a disability because it could make an enormous difference for other children with a disability.
My Emotional Response
Another reason I never wrote about her disability is that frankly, it was so hard seeing her suffer. I really didn’t want to talk about her at work. Work was an escape—a safe haven—from watching her in pain and thinking about how sad it is that she has this disability. I knew if I communicated her problems that well-meaning caring clients and others would ask about her. I would be taken from my haven and plunged back into thinking about Erica’s problems.
Parents of a child with a disability understand the anguish and fear we have for our child and how we constantly worry about their care. The worry is made worse by our fears of what will happen when we are gone. Which is what makes the rest of our story so important.
What We Have Done to Alleviate Some Worries
Through extensive research, effort, and applications of both new and old tax law, we uncovered several key strategies to financially protect Erica after we are gone. Through just two strategies, Erica will be almost $1.8 million dollars better off in today’s dollars from the time Cindy and I die until the time she dies than she would have been if we had not taken these steps.
Our history and our actions provide the backbone for the chapter dedicated to parents of children with disabilities. I write not only about these two steps but on some of the other most important financial steps that parents of a child with a disability should take to insure their child’s financial security.
My Aha! Moment
Then I realized the information in the chapter was so valuable that I really needed to make it available to the hundreds of thousands and preferably millions of parents of children with disabilities. It warranted greater exposure, and I have decided to repurpose the chapter into a special report.
I am the right guy to tell this story. A major part of the long-term financial solution stems from a series of Roth IRA conversions and Roth contributions. But an equally important part of the solution is getting the estate planning right.
But the main reason I am the right guy to spread this information is that I share a bond with parents of a child with a disability because I have first-hand experience with the problems we parents face and the strategies I am recommending.
Who Can Benefit?
Many parents will not have resources equivalent to mine to ensure such an advantageous outcome for their child. But my strategies can still provide a significant advantage for those with less resources. For example, someone who dies with a $500,000 IRA can, with Roth IRA conversions and appropriate estate planning, help their child be better off by $239,000 in today’s dollars. That might be the difference between your child being OK financially versus running out of money.
The report and the chapter in our book have other technical information on strategies that are powerful for parents of a child with a disability. Did you know that a beneficiary of a 401(k) plan can convert an Inherited 401(k) to an Inherited Roth 401(k) after the 401(k) owner dies? A beneficiary can’t make an Inherited IRA conversion to a Roth. This important nuance could be worth tens if not hundreds of thousands of dollars to the right beneficiary. Few financial advisors know about this strategy or can help implement it for the child after the death of the parent.
For More Information
Though we aren’t quite done with the report, if you are interested in reading the details, please go to https://PayTaxesLater.com/Disability. If you have a friend or colleague who has a child with a disability, please forward this column or link to them.
If you are interested in joining our launch team to promote Retire Secure for Professors and get early access, please go to http://PayTaxesLater.com/ProfessorBook. Please note that there will be a time lag between when you sign up, and when I deliver the report and/or the pdf of the book.