Patient Resources

Creating A Financial Plan for Fertility Treatment

By Gary A. Howard, JD, a Certified Financial Planner,

Why do we need a financial plan?
Just as a map helps you find your way on a trip, a financial plan is a roadmap that can help you stay on course to reach your financial goals. A sound financial plan is a comprehensive outline that deals with a variety of goals such as retirement, educational funding, insurance, cash flow, tax liabilities and estate planning. A financial plan includes specific ways to achieve financial goals, and the rationale for the plan. Because a goal can be achieved in many ways, a well-thought-out analysis may include alternative or “what if” scenarios along with the pros and cons of each option.

When deciding how to pay for fertility treatment, what long-term considerations should be evaluated?
Funding the costs of infertility treatments or adoption are for the most part short-term financial goals. Long-term goals include retirement, appropriate and affordable insurance protection, maintaining adequate cash reserves, and minimizing consumer credit card debt. Comprehensive financial planning encompasses a variety of goals and priorities.

Diverting funds from a retirement investment program to pay for infertility treatments or adoption may affect a retirement scenario. (Other financial goals that may be impacted are savings for children’s education and buyinga home.) That does not mean that choosing to borrow or divert funds meant for other goals is unwise; it simply means that you need to prioritize your goals and know the consequences of your choices. For instance, if money is needed to pay for an adoption or infertility treatments, a strategy to create more cash flow might be to reduce tax-deferred contributions to a 401K plan on a temporary basis. Depending on how long those contributions are reduced or suspended, your retirement date or retirement lifestyle may be affected.

What advice do you have for people considering using a credit card or home equity line to pay for infertility treatments or adoption?
In general, if available, utilizing a home equity line of credit is preferable to using a credit card. The equity line of credit would provide a potential tax deduction for interest paid on the amount borrowed. (Certain restrictions apply to the deductibility of interest under a home equity line, so consult a tax advisor.) Credit cards do not allow for this tax deduction and normally carry higher interest rates. Of course, you also must consider whether the credit card or the line of credit involves an adjustable interest rate, which affects borrowing costs. Currently, interest rates are generally rising. Consequently, repayment amounts will also increase and must be factored into the household budget. Either strategy needs to be evaluated for affordability and impact on other goals or needs, such as cash flow and reserves for emergencies and opportunities.

What specific strategies would you recommend to someone faced with mounting costs for infertility treatments and adoption?
Recommended financial strategies for one person may not be appropriate for another facing the same challenges. Considering limited financial means, there are a variety of options. For homeowners with adequate equity, a refinance or line of credit loan may provide the necessary funds, along with a potential mortgage interest deduction. Unsecured loanswill probably carry a higher interest rate. Borrowing or taking distributions from a retirement account (401K, IRA, etc.) may involve penalties and taxes, and will impact your retirement goal. As previously mentioned, you should consider reducing pre-tax contributions to qualified retirement accounts to provide better cash flow, at least on a temporary basis. But remember that every action also has consequences—taxable income may increase and the retirement goal may stretch out.

Should an individual or couple consider working with a financial planner?
For most people, dealing with their money is an emotional experience; many act on impulse, and feelings of fear and greed usually make people do the wrong thing with their money. A financial advisor should serve as a detached, objective professional who can remove the emotions from the financial planning process. Engaging the services of a financial planner or advisor is not transactional, or short-term in nature, but involves an ongoing relationship.

People seeking the assistance of a financial planner should expect initially to engage in a thorough discussion of their current financial status and their goals, and what financial strategies are presently in place. At the first meeting, the client should do most of the talking. This is an opportunity for the financial advisor to listen to the client’s financial goals and how he/she is currently working to achieve those goals. Also, and very importantly, the planner needs to explain how he or she is compensated, such as fee-only, or a combination of fees and commissions. In addition, clients need to ask questions about the planner’s experience and credentials. For example, some people wish to only work with an advisor who is a Certified Financial Planner (a financial advisor who meets professional standards including education, experience and ethics). However, it is important to realize that as circumstances change, sometimes modifications must be made with the financial plan or roadmap. It is important to regularly meet with the planner to stay on course financially.

How does one find a financial planner with experience with family building issues?
People find financial advisors in much the same way that they find an attorney or physician: they find professionals with specific, focused areas of practice. Perhaps the best way to find a financial planner is through referrals from friends, colleagues and others in similar situations. In addition, professional or certification organizations such as the Financial Planning Association or the Certified Financial Planner Board of Standards, offer referrals to those seeking planners with specific areas of expertise. Today, financial services professionals are much sought after, and so it is important that you do your homework in evaluating a potential advisor. Also, before you secure one, be sure you feel comfortable with the relationship.

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