How I Plan to Invest My Son’s $250,000 Insurance Payout for His Future Security

One of the worst things a parent has to do is fear for their children’s future, as it’s painstaking enough just to try and steer them in the right direction. No matter how hard we try as parents, sometimes the universe has a funny way of handling things, so you might need to think outside the box. 

Unfortunately, for one Redditor posting in r/personalfinance, they have to get creative to establish a fund for their son. After the son was in a serious car accident, the injuries were severe enough that holding down a full-time job may not be possible, at least in the near future, so they have to plan for several scenarios. 

As painful as this might be, the Redditor is being a parent first and doing the absolute right thing by looking to take the insurance settlement money and establish a future. 

The Accident

From the Redditor’s post, we know that their 20-year-old son was in a serious car accident seven months ago and received a settlement for approximately $250,000. The son is going through intense therapy right now, and while he isn’t completely disabled, the likelihood of a full-time job is going to be dependent on the severity of any brain injuries that he suffered. 

The great news is that the son is looking to start a “job” at a recovery center to help identify how well the son can perform in more intense environments. This is a great start to see where things can go from there, and the wife and the Redditor, both co-guardians, are hoping for the best. 

However, the most important thing right now is to determine how to maximize the $250,000 so that it grows sizable enough to help support the son after the parents are gone. At such a young age, they believe their son isn’t eligible for SSI from Social Security or to receive government assistance. This leaves the Redditor looking for advice on how to best proceed with this money. 

What To Do Next

While Reddit is immediately up in arms with the original poster about hiring a lawyer, it’s more than likely that the $250,000 is the maximum amount the insurance company will pay. This means that getting a lawyer may not help, and while it doesn’t sound like a lot of money for a brain injury, lawyering up doesn’t appear to be a solution. 

The bigger and most immediate question is whether the Redditor and or his wife should contact the Social Security Administration. Some options might be available, as Reddit seems convinced that SSI might still be on the table as an option. The hive mind in the comment section recommends that the parents connect with a financial advisor to look at some different options, including how to make sure the son receives any potential government benefits both now and after the parents pass away. The biggest takeaway is that SSI isn’t dependent on work history, so this path should be explored. 

Unsurprisingly, because it’s a Reddit favorite, there are several comments about investing the money in a Vanguard fund and forgetting about it until it is needed. Over the last 10 years, the Vanguard Growth ETF has had an average annual rate of return of 14%, which means making $25,000 annually in realized gains. In 10 years at 14% growth, it could be worth nearly a million dollars. 

Talk To A Financial Planner

The best thing to do here is to work with a financial planner and understand exactly how this money can grow and what, if any, money the Redditor and his wife are planning to leave behind. 

Alongside the hope that SSI and/or Medicaid might be a reality based on the brain injury and disability, if the financial planner can establish a plan that provides an aggressive rate of return to grow this money so it sets up the son for a future where work may not be possible, there might be as good an ending here as one can hope for, given the circumstances. 

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