Young professionals planning their finances and building a nest egg often overlook the potential challenges and costs associated with building a family.
Due to many social and cultural shifts, Millennials are having children later in life, a Pew research study indicates, and those who delay childbearing often require the use of assisted reproductive services. These services can be surprisingly expensive. Thus, the need for having access to, and understanding how to best use, a family-building benefit has never been greater.
Because Millennials are having children later in life, it has become more common for employers or insurance companies to offer some type of fertility or family-building benefit. However, the out-of-pocket costs can still take quite a toll on the finances of the individual. While some employers partner with family-building benefit management companies to improve outcomes and help maximize employee benefit dollars, individuals are still ultimately responsible for their own financial and family planning.
Here are three considerations for your clients who are planning their financial future, and their future family.
1. The Costs
In Vitro Fertilization (IVF)
If individuals have access to a fertility benefit, it is important for them to fully understand the benefit maximums, what the benefit dollars can be used for and their financial obligations once the benefit runs out. IVF treatment can cost anywhere from $12,000 to $30,000, depending on the location of treatment, medications used, and testing required. My wife and I went through several rounds of IVF treatment to build our family. We paid more than $127,000 out-of-pocket, and that was over 20 years ago. Even with an employer sponsored benefit, the costs of infertility treatments can certainly take a toll on an individual’s financial situation.
Egg and Sperm Freezing
Individuals in the prime of their career are increasingly focused on preserving their fertility as a means to postpone family-building for later in life. Some family-building benefits include solutions for egg and sperm freezing. On top of the cycle cost that comes with egg retrieval, there is an additional cost for storage that may not be covered by the benefit. Out-of-pocket, egg freezing can cost up to $10,000, and storage can run as high as $500 per year. Similarly, freezing and storing sperm comes with a cost. Depending on the number of specimens banked and the charges for testing, sperm collection is usually just under $1,000 and storage can vary anywhere from $100 a year to $500 per year. If these costs are not covered by an employer benefit, the cost will be the responsibility of the individual. However, many people feel that the rewards far outweigh the financial burden, as fertility preservation done at a younger age typically results in better outcomes in the future.