Clear Skies Ahead
Your definitive planning guide for the future
The pregnancy test is positive. Happy tears are shed and excited phone calls to your inner circle are made. Time to talk potential names, curate a registry, design the nursery, and…. do some estate planning? Yup. That’s sorta what needs to happen. From cord blood banking to college savings, we’ve got the lowdown on how to put a solid plan in place for your baby’s future.
Following your OB or midwife’s orders during pregnancy will give your baby the best shot at a healthy start, and adding cord blood banking to your birth plan can be a first step for a healthy future. How so, you ask? By giving parents the unique opportunity to be prepared for future (and unknown) scenarios regarding their child’s health — and potentially the health of any current or future siblings, too. You see, the blood within your newborn baby’s umbilical cord contains stem cells that can renew themselves and become specialized. These cord blood stem cells can help children replace damaged blood cells with healthy ones and strengthen their immune systems. If you’re wondering when your child might need such a thing, cord blood is currently used in the treatment of nearly 80 diseases, like blood disorders and certain cancers.2 Plus, the therapeutic potential of cord blood continues to grow. Research in the area of Regenerative Medicine is underway using cord blood in hopes of helping treat conditions once thought untreatable, like cerebral palsy and autism.104,109 ViaCord , a family cord blood bank, knows a thing or two about the process — to date, they’ve preserved the cord blood of more than 350,000 newborns and have released over 360 stem cell units for transplant or regenerative medicine research.1,5
Here’s a quick rundown on how the process works: prior to birth, you’ll receive your ViaCord collection kit in the mail. Make room for it in your hospital bag (seriously…you won’t need that many newborn outfits. We promise.). After you give birth, either vaginal or c-section, the umbilical cord is clamped and cut (standard procedure) and your OB or midwife will collect the remaining blood from your baby’s umbilical cord in an easy and painless process – it only takes about 5 minutes! Once you notify ViaCord of your delivery and the collection is complete, a medical courier will pick up the kit and send it off to ViaCord’s lab and storage facility, where it is processed and stored for potential future use.
Now that we’ve nailed the healthy start, it’s time to talk finances, insurance and long term planning. We tapped Tim Rickard, CFP, a financial advisor with Northwestern Mutual, to explain some of the basics of family financial planning. “The most important thing you can do for your child’s financial future is to have a comprehensive financial plan that is based on your vision and goals,” he says. This plan should include the financial fundamentals: “an emergency fund, disability insurance, life insurance and saving for retirement. By protecting yourself, you are protecting your children.” That seems easy enough, right?
Tim also encourages new parents to start that college savings stat — and in a 529 account. It’s got some serious perks: “your 529 contributions grow tax-free and are distributed tax-free, as long as the funds are used for qualified education expenses. Many states sponsor 529 plans and provide a state tax deduction on your contribution, up to a certain amount. Most 529 plans provide investment options ranging from very aggressive to conservative, including target date mutual funds that adjust automatically as your child gets older. These options not only provide the opportunity for greater growth than cash, but make managing these investments simple and low maintenance.” Automatic savings that adjust on their own? Sounds like our kind of party.
Add adequate life insurance to cord blood banking and a 529 plan, and you’ve got the triple crown of responsible parenting. Take a look at the life insurance (if any) supplied by your employer, and add to it accordingly. “Typically, people look to pay off the mortgage, provide an income replacement for the surviving family members and fund college education for the children. These three things added up will give you a total coverage need. If your current assets and employer sponsored life insurance does not equal the total coverage need, then you need more life insurance,” Tim explains. He recommends enlisting the help of a financial planner who can help work out the specifics of your situation.
About that estate planning. Turns out, it’s as important as it sounds. Things like guardianship of your children and the management your assets need to be made official. Not easy questions to answer, but Tim explains it will be worth it in the end. “Answering these key questions will take the burden off of your family, friends and the court system during a very difficult transition. The estate plan will also provide for the efficient transfer of your assets, which ultimately ensures that your wishes will be carried out as you desired.”
This plan may add a few more to-do’s to your baby prep list, but a huge pay off awaits: peace of mind. Life can be unpredictable, but setting a solid foundation in place will help you tackle whatever challenges lie ahead.
Timothy Rickard is an Insurance Agent of The Northwestern Mutual Life Insurance Company (life and disability insurance, annuities, and life insurance with long-term care benefits) and Northwestern Long Term Care Insurance Company, Milwaukee, WI, (long-term care insurance) a subsidiary of NM and a Registered Representative of Northwestern Mutual Investment Services, LLC (securities), a subsidiary of NM, broker-dealer, registered investment adviser and member FINRA and SIPC. Representative of Northwestern Mutual Wealth Management Company®, Milwaukee, WI (fiduciary and fee-based financial planning services), a subsidiary of NM and federal savings bank. Financial Representatives do not give legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.