41F / 43M, ~$2.4M invested - how should we plan for lifelong financial support of our special needs daughter?
Hello. This is my first time posting. My husband (43M) and I (41F) live in a VHCOL area of Southern California and would appreciate some perspective on incorporating our special needs daughter’s lifelong financial needs into our retirement and investment planning.
We have approximately $2.4MM invested across 401Ks, IRAs, and taxable accounts. My 401K is our largest account at ~$1.2M and is currently:
73.4% U.S. equities
15.9% international equities
10.7% bonds
2.9% company stock
Our other accounts are broadly similar, so I’m using this as a rough proxy for our overall allocation.
Our situation:
- Primary home: ~$1.5M value / ~$600K mortgage at 2.5%
- Two cash-balance pensions: ~$189K combined accrued value
- Two children; one has significant lifelong support needs
- Both currently working and saving
- Target retirement spending: ~$160K/year after tax, assuming the mortgage is paid off
- Planning Social Security: ~$72K/year combined at 67, after reducing current estimates by 25%
- We currently expect to work until around 60/62, but would like the flexibility to slow down earlier if financially feasible
Our daughter currently qualifies for maximum IHSS hours, which is an important part of her current support structure. However, we’re planning under the assumption that she may require substantial financial support for the rest of her life, potentially long after we’re gone.
How should we incorporate this responsibility into our overall retirement and investment strategy?
I’m interested in how others would think about:
- How much additional retirement/investment assets should we target given the possibility that our portfolio will eventually need to support our daughter for life?
- How should we balance our own retirement security with preserving assets for her future care?
- Should our investment strategy or asset allocation be different because we have this additional long-term obligation?
- How should we think about retirement timing and the possibility of slowing down our careers while still ensuring we are adequately funding her future?
- How do people approach the transition from parents providing financial support to long-term support after the parents are gone?
- Are there financial-planning considerations we’re likely overlooking?
We are already thinking about the estate-planning/legal side separately. How would you incorporate a potentially lifelong dependent into your definition of “financial independence”?
Thanks in advance for any perspectives, especially from other families who have faced a similar situation.