Overwhelmed by the costs of adoption? It may not be quite what you think…
Individuals and couples wishing to have a child but unable to do so naturally typically have two options: adoption or assisted reproduction (ART). Both options are relatively comparable in cost, with the average price of a domestic adoption in the United States ranging from $20,000-$45,000 and a donor egg pregnancy via in vitro fertilization priced between $20,000-$35,000. If, however, you require a donor embryo, the cost could be $7,500-$20,000, and gestational carrier/surrogacy can drive the cost from $50,000 to over $100,000.
Assuming, however, you are looking simply at the comparable donor egg option, one important thing to keep in mind is that adoption, unlike assisted reproduction, offers a federal tax credit and many employers offer credits as well. For a couple with combined annual incomes of less than $180,000, the federal adoption credit could be up to $13,190. Employer tax credits typically range from $2,000-$5,000 and are offered by companies like SAS, CISCO, IBM, the United States Department of Defense and many others.
I encourage clients to determine first how much these credits will offset their cost of adoption to determine their ‘bottom-line’ cost.
So now that you have done your cost analysis, how do you afford your ‘bottom-line’? Most adoptive families are middle-income and are able to work out the costs over time. Options for financing an adoption include:
- Borrowing against home equity, allowing a deduction while waiting for the tax credit;
- Borrowing against a retirement or 401K plan
- Grants and adoption assistance programs through public and private organizations;
- Asking family members and relatives to assist with cost
Where there’s a will, there’s a way!