By Bennett C. Whitlock III
Whitlock Wealth Management
For people unable to conceive a child by traditional means, there are alternative options to consider, such as adoption and more recent development, in vitro fertilization. Both offer possible opportunities to bring children into your life, but there is often a high cost associated with either option. If you are considering your options for expanding your family, it is important to understand the financial realities associated with it and develop a plan to deal with them.
IVF – Awesome Technology at a High Price
IVF has made a real difference in the lives of many people who want to have children. In a recent study conducted by the Centers for Disease Control and Prevention, researchers found that more than 85,000 women in the United States undergo IVF treatments each year.
The total cost associated with an initial treatment is approximately $ 24,000. Since most women require multiple treatments, average costs can reach $ 50,000 1. Make sure you get a clear estimate of expenses from your supplier before making a final decision.
In many situations, your health insurance will not cover the costs, or if it does, often only part of it. Be sure to check with your insurance company to find out what type of treatment might be eligible for coverage.
Funds set aside in a health savings account or flexible spending account can be used to fund IVF treatments. Personal savings are another source, but try not to put your emergency funds (which should total the equivalent of at least three to six months of income) at risk to meet other needs.
If a loan is required to offset costs, be absolutely clear about the terms of the loan and how the monthly payments over an extended period will affect your budget and other financial goals. You may want to consider loans from family members or a home equity line of credit. Alternatively, many medical clinics also offer loan programs, often with attractive interest rates.
Adoption – Expenses may vary
Adoption has been a long-standing option for those looking to bring a child into their family. You can also anticipate costs with this process, but the amount usually depends on your approach.
Adopting a foster child can cost up to $ 3,000, depending on whether or not you plan to hire a lawyer to help you with the paperwork. Adoption through a private adoption agency will be at the high end of the spectrum, with costs of up to $ 30,000 or more2. Other costs may also come into play.
Some employers may offer adoption assistance as a benefit, which can help defray some of the costs. In addition, tax laws allow you to claim an adoption tax credit (up to $ 14,440 in 20213) for eligible adoption expenses for each child. Eligibility for these credits is subject to income limits. Be sure to check with your tax advisor for more information.
Planning is essential
IVF and adoption have great potential to help you achieve your goals of adding children to your family. If either is under consideration in your household, it is essential to anticipate the financial consequences. Talk to your financial advisor about developing a viable strategy for dealing with costs. Planning should go beyond the financial commitment involved in the adoption or IVF processes. You’ll also want to consider the long-term financial impact of having another person in your household and how to prepare for it.
Bennett C. Whitlock III, CRPC®, is a Private Wealth Management Advisor and Managing Director of Whitlock Wealth Management, a private wealth management consulting firm of Ameriprise Financial Services, Inc. He provides financial planning and management strategies. asset management pays off and has been in practice for 22 years. To contact him, call 703.492.7732 or visit his website at whitlockwealth.com. Ameriprise Financial Services, Inc. Member of FINRA and SIPC.
1 Source: FertilityIQ.com, “The cost of IVF per city”, (fertilityiq.com/topics/ivf/the-cost-of-ivf-by-city).
2 Centraide, “Adopting a Child: Financial Considerations” (unitedway.org/my-smart-money/financial-planning/starting-a-family/adoptinga-child-financial-considerations).
3 Internal Revenue Service, “IRS Provides Tax Inflation Adjustments for Tax Year 2021,” October 26, 2020 (irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2021)