Carrie, 33, and her husband, 39, recently started in-vitro fertilization (IVF) after other reproductive treatments failed. They've been undergoing fertility treatment since March 2011.
The process has taken its toll on the couple.
"We don't allow ourselves to spend money on hobbies, clothes, trips or any enjoyable activity," says Carrie, who asked that her last name not be used. "We can't save money for retirement or long-term goals. Right now, our only focus both financially and emotionally is fertility treatments."
The average cost of each IVF cycle is between $10,000 and $12,000, according to IVF.ca. But the low success rate—just 29% for women between 35 and 39, and 12% for women 40 and older—means couples try multiple times.
Carrie and her husband have set their limit at three cycles. And if they're unsuccessful, they will turn to adoption, which Carrie expects will cost between $30,000 and $40,000.
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One in six Canadian couples experience infertility, according to the Canadian Fertility and Andrology Society. And for many, it's a surprise, so they don't have much time to find the cash.
"If there are no funds from savings, the only alternative is to borrow," says Kathryn Jankowski, a vice president at T.E. Wealth in Toronto.
If couples' family members aren't willing to lend money, steer clients toward shorter-term, less expensive loans such as mortgage renewals.
"The last thing you want to do is use your credit cards," she warns.
If couples don't need a large sum right away, a secured line of credit is usually more economical than a large loan, adds Toronto accountant Jonathan Ruben.
"We've seen $5,000 to $10,000 needed per stage. Then clients wait one-to-three months to see if it was successful," he says. "A secured line of credit means you will not end up paying interest on funds you don't require."
Optimize medical expense tax credits
Ruben also tells prospective parents to claim fertility-related outlays as medical expenses at tax time. These include the cost of medication and services provided for intrauterine insemination and in-vitro fertilization. (There's an additional credit if clients live in Manitoba.)
Clients may claim any non-reimbursed medical expenses, including prescribed medication costs not covered by an employer or private plan.
The tax credit is non-refundable, meaning it lowers the tax liability. So it's typically better to claim medical expenses on the return of the spouse with lower net income. However, if the lower-income spouse doesn't have enough tax payable to offset the medical expense tax credit, the higher income spouse should claim it.
The expenses can be claimed for any 12-month period ending in the tax year, so choose that timing wisely, says Ruben.
If a taxpayer incurs significant medical expenses in November 2011, but has already hit his limit, he can choose November 1, 2011 to October 31, 2012 as his 12-month period and claim them on his 2012 income tax return.
Medical expenses incurred outside Canada may also be eligible.
This is good news for Carrie, as she and her husband will have their first IVF treatment in Cancun, Mexico. She says treatment at a clinic in Toronto will cost approximately $14,300, including $4,000 of medication. The same treatment in Cancun costs $6,500. Even with accommodations and airfare, the total is $8,100.
While expenses paid to a medical practitioner or licensed hospital outside of Canada will likely be eligible, accommodation and travel expense are usually ineligible, says Ruben.
Adoption tax credit
If Carrie and her husband decide to adopt, they can claim eligible adoption expenses for a child under 18. This includes adoption agency fees, court costs, legal fees and reasonable travel and living expenses.
With indexing, the maximum federal amount in 2012 is $11,440 at a rate of 15%, for a credit of $1,716. The credits can help boost tax refunds at a time when clients need the money, says Ruben.
Getting back on track
If couples successfully conceive, there's a whole new list of expenses and concerns they need to think about, starting with the revision of the will and plans for childcare, says Jankowski.
But the focus should be on paying off the highest-rate debt first.
Couples who decide to go the childless route will usually go through a mourning period. Revisiting the financial plan can help them visualize and adjust to their new lives.
As for people who continue with treatments at the risk of further compromising financial stability, they want advisors who can be honest and sensitive.
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"I would love someone who has compassion, especially when money becomes the number one factor that makes you not undergo another treatment," says Carrie. "Advisors have to understand you're going to be destroyed by the news that they're not going to be able to find money for you.
"I would expect the same level of empathy and kindness that a doctor would have."