1. While most parents are concerned with their kids' financial security till their early 30s, for a special needs child, you need to ensure financial independence for entire lifespan.
2. Prepare a list of the child's current expenses, then add those that are likely to occur in future, like a caregiver's salary and medical costs to get a fair idea of monthly investment needed to achieve that goal, alongwith cost of inflation.
3. Buiild income-generating assets to take care of child’s benefit alone as early as possible, and any cash gifts received by the child should be invested in long-term options, such as equity mutual funds, because you can afford to take risks as you are investing for a very long period.
4. However, if your child needs constant medical care, you should avoid a large exposure to equities, and your portfolio must be balanced with a 60:40 ratio skewed towards debt to protect invested capital in case money is immediately needed.
5. Take largest term insurance cover for longest tenure that you can get for yourself, and even whole-life insurance plans with limited payment period may also suit as the policy will never lapse, with proceeds helping to fund the child, partly as a lump sum and partly as annuity.
6. If your child requires medical treatment or suffers from severe disability, avail allowable tax deductions for expenses through certificates from a specialist at a government hospital.
7. For estate planning, appoint a guardian and form a trust as well, to take care of property and generated income, so that funds are used appropriately for entire lifespan of your child.
2. Prepare a list of the child's current expenses, then add those that are likely to occur in future, like a caregiver's salary and medical costs to get a fair idea of monthly investment needed to achieve that goal, alongwith cost of inflation.
3. Buiild income-generating assets to take care of child’s benefit alone as early as possible, and any cash gifts received by the child should be invested in long-term options, such as equity mutual funds, because you can afford to take risks as you are investing for a very long period.
4. However, if your child needs constant medical care, you should avoid a large exposure to equities, and your portfolio must be balanced with a 60:40 ratio skewed towards debt to protect invested capital in case money is immediately needed.
5. Take largest term insurance cover for longest tenure that you can get for yourself, and even whole-life insurance plans with limited payment period may also suit as the policy will never lapse, with proceeds helping to fund the child, partly as a lump sum and partly as annuity.
6. If your child requires medical treatment or suffers from severe disability, avail allowable tax deductions for expenses through certificates from a specialist at a government hospital.
7. For estate planning, appoint a guardian and form a trust as well, to take care of property and generated income, so that funds are used appropriately for entire lifespan of your child.