Most parents want to leave their kids some inheritance. But for Ian and Lisa Revell, it's a necessity.
Their daughter, Monica, 19, suffered traumatic brain injuries from a car accident nine years ago and needs continual care, something the Revells have been able to do on their own -- so far.
But Ian, 50, and Lisa, 42, now are looking at their own mortality and want to leave enough money to provide for Monica after they're gone.
"We want to make sure she doesn't have to settle for second best," Ian said. "In an ideal world, we'd love for her to have a full-time companion."
Like other parents with disabled children, the Revells are essentially planning two retirements, theirs and their daughter's. And they have to balance Monica's needs with other demands on their money, as well as with some dreams they'd like to finance.
There's college for their son, Ryan, 9, and a $196,000 mortgage they'd like to pay off in nine years. Their ranch-style Rancho Cucamonga home, set among fruit trees they planted on an acre of land, needs some remodeling, and they'd like to put $100,000 into it. And they want to retire in 13 years.
The good news is that the mortgage is their only long-term debt. Ian, a special education teacher, and Lisa, who works in a guidance office, earn a combined $120,500 a year from their jobs with the Chaffey Joint Union High School District.
"We don't scrimp," Ian said. "We're just very simple."
But they're going to have to lower their expectations considerably if they want to ensure Monica's financial security and still do much of what they want, said Scott Dauenhauer, a certified financial planner with Meridian Wealth Management in Laguna Hills.
"Even if they saved every dime they have, they're not equipped to provide for extended care for Monica in a private facility," Dauenhauer said.
The Revells have long had thrift ingrained in them, stemming partly from Ian's upbringing on a dairy farm in Cambridge, New Zealand. Ian didn't wear shoes until high school, mainly because it wasn't the custom. And most of the food on the family's dinner table came from their farm.
Ian's parents never believed in owing people money, and Ian follows that philosophy by paying off his credit cards monthly and adding $300 each month to his mortgage check.
Each year, the Revells save about $11,000. So far, they've put away $110,000 in a retirement account. An additional $30,000 sits in checking and savings accounts.
Their world was turned upside down in 1999 when Monica, then 10, was hit by a car as she jaywalked across a busy road. She was in a coma for two months and was left with brain injuries that diminished her ability to care for herself.
Since the accident, her parents and Lisa's mother have cared for Monica, who also goes to a training center to learn such basic life skills as cooking and cleaning.
As much as the Revells want to make sure Monica can go into a private facility when they die or grow too old to care for her, they know she will have to rely on state and federal support. Private care, after all, costs $3,000 to $8,000 a month, according to Susan Katzen, a lawyer in Huntington Beach who handles special-needs planning.
"There's a huge population of special-needs families, most of whom are unprepared because they don't know who to turn to or they think the government will take care of them," said Jaret Vogel, a special needs counselor with Prosperity Life Planning, a Florida nonprofit organization that helps families with special-needs planning.
Depending upon the assessment of Monica's disability, there are "a million different levels of care and as many as 30 different state-funded living arrangements, ranging from group homes to nursing facilities," said Charlene Harrington, a sociology professor at UC San Francisco and the school's director of the Center for Personal Assistance Services.
The Revells' savings, however, are crucial in filling the gaps in public funding by paying for basics such as clothing and dental care as well as for any additional help Monica might need.
That $110,000 in a separate retirement account is in addition to a solid pension Ian and Lisa should be getting from California teacher and employee funds. Dauenhauer suggested that, post-retirement, the Revells live on the state pensions and use the other retirement account to fund their children's needs, with the majority earmarked for Monica.
If they continue to contribute $500 a month to that account, the money could grow to $262,000 in 15 years, assuming a 6% annual return, Dauenhauer said.
He also suggested they set up a Roth IRA, putting in $6,300 a year, to use in the same way to help fund Ryan's college education.
Though planners often recommend tax-free 529 college savings plans, Dauenhauer said a Roth IRA would give the Revells some flexibility should they need more money for Monica. And Ian, then in his 60s, could take money out of the account for education expenses without paying any penalties, he said.