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Special Needs Planning Special Report, Pt. 1: Merrill Releases a Calculator

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This is the first in a four-part special report on special needs planning for advisors and their clients. In part one below, a new online tool for parents and caregivers.

Merrill Lynch on Thursday premiered a special needs calculator for the parents and caregivers of special needs individuals. The calculator is designed to assist in calculating the amount of money necessary to sustain a special needs person throughout life, and is a variation on the one long used by Merrill advisors who carry the Certified Special Needs Advisor designation.

The calculator, available for anyone’s use at a Merrill website, analyzes an individual’s needs based on the input of financial information and projected life expectancy. It factors in several variables, including projected income of an individual with special needs; monthly expenses that can include housing, transportation, special education and health-care costs; and also accounts for federal and state government benefits. The calculator also factors in parents’ number of years until retirement, with the flexibility to modify assumptions about return on investments and inflation rates.

Chris Sullivan, head of Special Needs Financial Services for Merrill LynchIn a statement, Chris Sullivan (left), head of Special Needs Financial Services for Merrill Lynch, said of the need for such a tool, “One of the greatest challenges parents of children with disabilities face is providing their loved one with financial security. Thanks to medical advancements, people with special needs are living longer, fuller lives than ever thought possible. This welcome trend has left many families unprepared to provide a lifetime of financial support while also achieving other important goals.”

With the calculator, families can identify potential shortfalls in finances intended to sustain the quality of life of an individual with special needs long after parents or caregivers retire. Based on its open-source design, the calculator can be accessed online via an iPad and other tablets and smartphones. Families can then choose whether to consult with an advisor for more in-depth analysis and planning.

Sullivan, himself deaf, started the special needs group at Merrill over a decade ago, according to Scott MacDonald, a Merrill advisor based in Modesto, Calif. According to MacDonald, Sullivan “started the department and brought in advisors already doing the work [with special needs families] to set it up.”

Special needs families have “complex needs,” adds MacDonald. “Planning and investing are much more complicated than for a regular client,” he explains. “They have a need to preserve and protect public benefits like disability benefits and Medicaid, and [special needs individuals] can’t go back to work, so retirement may be a 60-year timeline that we have to plan for.”

There are complications not just families, but planners unfamiliar with the ins and outs of special needs rules and regulations may not be aware of, warns MacDonald, who points out that “if grandma and grandpa leave money [directly] to the child, the money goes [instead] to the state to repay benefits [already collected].”

The calculator is designed to be easy to use, says MacDonald; families can get a simplified version of a plan in ten minutes. If they want to go deeper into expenses and itemizing, he adds, as well as specialized needs unique to their situation, it can take a half hour to an hour.

“A lot of work is done figuring out what the needs are,” he says. There is also a link on the website to a free generic workbook that shows families issues they need to look at regarding income and expenses, as well as additional links to more information.


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