- Date : 15/02/2023
- Read: 3 mins
Parents can sometimes struggle to prepare for the financial needs of their differently-abled children. Therefore, it is important to know the right tips for investing for specially-abled children.
As parents, one of your priorities is to save for the financial needs of your child. Financial planning for specially-abled children can be a complex and overwhelming task. With the unique challenges and expenses associated with caring for disabled children, it is essential to have a well-thought-out plan in place to ensure their financial stability and well-being now and in the future. Here are some things that can help.
Investing for specially-abled children
It is important to create a distinct financial plan for a child with special needs, including assessing their requirements, planning for present and future care, researching government benefits, investing in education, building a support network, and more. With so many components, it helps to use a bucket strategy to ensure you make a comprehensive financial plan without overlooking key areas.
Also Read: Best Investment Tools For Creating Children's Education Fund
What is bucket strategy in investment?
A bucket strategy is an investment approach that categorises your goals into three buckets: emergency or short-term money goals, medium-term money goals, and long-term goals. Short-term goals can include immediate expenditure, such as a health emergency. Medium-term goals can include expenses you may incur in the next five years, such as scheduled health treatment, education, etc. Lastly, long-term goals can include high-education expenses, lifelong care, etc.
Investment options for specially-abled children
Here are some investments for disabled children that can cater for each of the varied goals listed above:
- Life insurance: Life insurance is a must-have for all parents. In the unfortunate event of your demise, life insurance proceeds can help your child gain access to healthcare, a life of comfort and dignity, and pursue their dreams. Life insurance also offers tax benefits that help you save money and use those funds for your child’s present needs.
- Government-backed schemes: Government-backed schemes like the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), etc., can help you invest your money in low-risk options and ensure guaranteed savings for your child. PPF can be used for various financial goals, such as healthcare, long-term care, education, etc. The SSY can be specially opened in the name of a girl child. You can use it for your child’s long-term needs as the plan matures when the girl child turns 21. This is also a low-risk savings scheme.
- Mutual funds: Mutual funds cater to varied types of goals. Equity funds can be ideal if you have a high-risk appetite. They can offer high returns over a long-term horizon. Index funds and hybrid funds can be suitable if you have a medium-risk appetite. If you prefer low-risk options, you can consider investing in debt funds.
Also Read: Retiring In Uncertain Times? Try The Three-Bucket Strategy
Impact of investing for specially-abled children on parents and children
Investing for your child’s financial needs lets you cater to their miscellaneous goals. It offers you peace of mind and offers your child financial security in your absence. It also enables you to prepare for the seemingly big expenses in a steady and feasible manner, lowering your financial burdens and responsibilities in the long run.
Sources:
As parents, one of your priorities is to save for the financial needs of your child. Financial planning for specially-abled children can be a complex and overwhelming task. With the unique challenges and expenses associated with caring for disabled children, it is essential to have a well-thought-out plan in place to ensure their financial stability and well-being now and in the future. Here are some things that can help.
Investing for specially-abled children
It is important to create a distinct financial plan for a child with special needs, including assessing their requirements, planning for present and future care, researching government benefits, investing in education, building a support network, and more. With so many components, it helps to use a bucket strategy to ensure you make a comprehensive financial plan without overlooking key areas.
Also Read: Best Investment Tools For Creating Children's Education Fund
What is bucket strategy in investment?
A bucket strategy is an investment approach that categorises your goals into three buckets: emergency or short-term money goals, medium-term money goals, and long-term goals. Short-term goals can include immediate expenditure, such as a health emergency. Medium-term goals can include expenses you may incur in the next five years, such as scheduled health treatment, education, etc. Lastly, long-term goals can include high-education expenses, lifelong care, etc.
Investment options for specially-abled children
Here are some investments for disabled children that can cater for each of the varied goals listed above:
- Life insurance: Life insurance is a must-have for all parents. In the unfortunate event of your demise, life insurance proceeds can help your child gain access to healthcare, a life of comfort and dignity, and pursue their dreams. Life insurance also offers tax benefits that help you save money and use those funds for your child’s present needs.
- Government-backed schemes: Government-backed schemes like the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), etc., can help you invest your money in low-risk options and ensure guaranteed savings for your child. PPF can be used for various financial goals, such as healthcare, long-term care, education, etc. The SSY can be specially opened in the name of a girl child. You can use it for your child’s long-term needs as the plan matures when the girl child turns 21. This is also a low-risk savings scheme.
- Mutual funds: Mutual funds cater to varied types of goals. Equity funds can be ideal if you have a high-risk appetite. They can offer high returns over a long-term horizon. Index funds and hybrid funds can be suitable if you have a medium-risk appetite. If you prefer low-risk options, you can consider investing in debt funds.
Also Read: Retiring In Uncertain Times? Try The Three-Bucket Strategy
Impact of investing for specially-abled children on parents and children
Investing for your child’s financial needs lets you cater to their miscellaneous goals. It offers you peace of mind and offers your child financial security in your absence. It also enables you to prepare for the seemingly big expenses in a steady and feasible manner, lowering your financial burdens and responsibilities in the long run.
Sources:
