Financial planning for your child with Down syndrome

When you have a child with Down syndrome, one thing that worries you everyday is their adulthood and future. The best thing we can do for our children’s future is making their finances secure. No matter how much or how little support they need in their adulthood, no matter who their caregiver is, having money in their name will make their life easier, open doors, and create opportunities.


  • Term Life prepares for the unexpected, you or your spouse dying suddenly in the next 30 years.

  • You pay a monthly premium, if the unexpected happens, the beneficiary gets the whole amount you are insured for. If you don’t die before the policy is up, the insurance company pockets the premium.

  • The premiums can be as low as $30 a month, depending on how much coverage you purchase and how young and healthy you are.

  • Buy separate term life insurance policies for you and your spouse.


  • This account lets you save post-tax dollars in your child’s name towards qualifying expenses, without impacting their eligibility for government benefits.

  • ABLE account provides a debit card, that your child can use for their expenses. Expenses may include education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services and other expenses which help improve health, independence, and/or quality of life.

  • You can save post-tax dollars up to a maximum of $14000 a year in this account. You cannot save more than $100,000 in this account if you want your child to still qualify for Medicaid and SSI. This limit is why you need Life Insurance and Special Needs Trust as well.

  • ABLE accounts grow tax free, so you can invest up to $200-250 a month from birth to 18, and stay below the $100,000 limit, and use the money for college.


  • This is a legal device that protects your child’s eligibility for Medicaid/SSI and other government benefits while holding money for them.

  • You need an attorney to draw this up for you. The simplest and cheapest way to do a Special Needs Trust is to just draw it up and name it as the beneficiary for the life insurance policies.

  • If you want to save money regularly to the trust, then you have to pay for trust maintenance over the years (this is usually only done by families with a lot of disposable income). Many people (including us) just pay for drawing up the trust and leave it penniless and maintenance-free till insurance payouts come.


Now that we have dealt with the “after-us” financial scenarios, let us talk about our kids’ adulthood in our retirement. We all hope that our kids will go to college and/or live independently, and there are governmental programs and some scholarships that help them to do so. But long waiting lists for these programs are the norm for many states, and often money is the barrier for our kids reaching these hallowed milestones. For this reason, we feel like the best thing we can do for our child is put away money for their future.

My approach is to include my son in the retirement planning calculation for me and my husband. Retirement planning looks different for different people, and different strategies work best, and a financial planner or a good book on the topic can teach you all you need to know.


  1. Level 1 (Most Minimum): Buy Term Life Insurance to replace income of the earning spouse. For example, If one spouse is working a job and earning $75,000 presently, you need to buy term life insurance with a $1.5 million payout to replace their income in case the unexpected happens.

  2. Level 2: Buy Term Life Insurance for both spouses. Set up a special needs trust, and have part of the insurance payout go into the special needs trust.

  3. Level 3 (Best Case): You have optimum Term Life insurance, a special needs trust, and have part of the insurance payout go into the special needs trust. Do retirement planning such that you will have post-retirement income to support your child in addition to you and your spouse. Invest in the ABLE account for your child’s  college/adulthood expenses.

I cannot emphasize enough the importance of starting early. While you are young and healthy, insurance premiums will be low and locked in for the rest of your life. The later in life you go insurance shopping, the more you will pay each month. You can start with the most minimum, and buy additional insurance policies when your finances improve.


  • Request cash gifts instead of toys and clothes for the child’s birthdays from friends and relatives to help pay the insurance premiums. If the child’s grandparents are able, you can request their help to pay the insurance premiums.

  • A financial planner and an attorney will help you figure out the specifics of the best insurance products for you, and help you set up a special needs trust. Your local DSA parents are the best source to find dependable attorneys and financial planners.

  • Special thanks to Emily Foley, who educated me on this.

  • While I am not an expert, I would be happy to offer ideas and tips for your personal situation. You can contact me via this form.

To read more articles by Sruthi Muralidharan or to follow her blog, visit her website No BS About DS.