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Jagger’s changing diapers at 72. How to manage that

Careful financial planning is key to making this work

Mick Jagger
Dave J Hogan | Getty Images
Mick Jagger

If rocker Mick Jagger isn't out touring later this year, he'll be home changing diapers, at age 72. The rock legend is awaiting the arrival of his eighth child.

While parenthood in older age is still the exception rather than the norm, financial planners say it's becoming increasingly common.

"In your 60s, we're not just talking about celebrities as older parents," said Terry Siman, managing director at United Capital, based in North Wales, Pa. "People get remarried, and that'll do it."

Jagger is not the only older dad who's fiddling with bottles these days. Fellow Rolling Stone Ronnie Wood, 68, and his wife welcomed twins this May. Last year, Billy Joel at 66 became a dad for the second time.

Parenthood at a later age brings a host of money issues, so preparation is key if you're about to juggle day care and retirement.

"If Mick Jagger does the planning, he'll finally get the 'Satisfaction' he's been looking for," said Gavin Morrissey, managing partner at Financial Strategy Associates in Needham, Mass.

Lock down your estate plan

Think of guardianship and how you would want your child to be raised if you were no longer around – or if you were incapacitated.

"Imagine a parent who is 50 and naming an 80-year-old grandfather as the guardian," Morrissey said. "At an advanced age, it's more likely that something will happen to those parents."

Your child's older sibling may be a viable guardian.

Then there are the assets. Consider drafting a trust with very specific provisions as to how and when the money ought to go to the child. This is critical for individuals with multiple children.

"Parents will want to protect the minor child first," said Ben Gurwitz, chief investment officer of Financial Life Advisors in San Antonio, Texas. One of his clients is 72 and has adopted her six-year-old great-granddaughter. By the time the child is college-bound, the great-grandma will be 84.

"If Mick Jagger does the planning, he'll finally get the 'Satisfaction' he's been looking for." -Gavin Morrissey, Managing partner at Financial Strategy Associates

To ensure fair distribution of her holdings and to keep the estate out of probate, the client set up a living trust. This trust will hold the assets to put the child through college, prior to distributing the estate to the woman's natural-born children.

Be particular about the timing of distributions. "You can have specific benchmarks along the way," Siman said. "'Do this when the child graduates from college. When the child wants to buy his first home, do this.'"

Titling your property correctly is as important as drafting the estate plan.

"Unfortunately, many people will go to the estate plan attorney to draft a trust, but you'll find that none of the assets are titled to match [the document]," said Morrissey. Incorrect titling could lead to assets falling outside of the trust, going to probate or being distributed in a manner that's contrary to your wishes.

Think insurance

If you have a child late in life, you'll wish you had workplace medical coverage.

Though some retiree healthcare plans cover minor children, most don't and Medicare won't. Expect to purchase private coverage for your child.

In the best-case scenario, you or your spouse are still working and able to access health insurance. Without that, you'll have to turn to your state or federal health insurance exchange. "It's gotten easier [to obtain coverage] through the Affordable Care Act, but it's also more expensive," Gurwitz said.

Also think about life insurance. A person in their 60s or 70s will have a hard time obtaining coverage at a low cost. However, if the resources are available, it may make sense to buy a 20-year term policy that will protect your child through the age of majority in the event you pass away.

College vs. retirement income

Take the help where you can get it: If you are already claiming Social Security, your minor child may be eligible for a payment of as much as 50 percent of your benefit. As of the end of June, 335,478 children were receiving Social Security payments.

In order to qualify, the child must be single and under age 18, under 19 if they're still in high school, or 18 and over but disabled by a condition that started prior to age 22.

There are restrictions on what you can do with your child's Social Security funds. For example, you can deposit them in a bank account or purchase U.S. savings bonds, and you must keep records on what you do with the money.

Parents aren't permitted to directly deposit their child's Social Security benefits into a 529 college savings plan, Gurwitz said. However, it's common for them to spend the benefits on the child and invest a similar amount of money from their personal funds into a 529.

There's an additional benefit to being a brand new parent who's also no longer working and living off retirement savings.

"If you have low employment income and most of your savings is in exempted retirement accounts, you can maximize your financial aid," Gurwitz said.