Adopting a Child: Financial Advice for Hopeful Parents

How much does it cost to adopt a child? That depends on which method you use, as there are several different paths to parenthood. And there are several ways to help pay for it too.

A young mom nuzzles her adopted son.
(Image credit: Getty Images)

I wrote recently about the taboo topic of the costs of infertility, discussing in vitro fertilization (IVF) specifically. The expenses involved – including the medications, time away from work and family and counseling costs – and other issues that go with it can be significant, even prohibitive. Add to this the polite secrecy around infertility issues, and then the hesitance to talk about money in general, and the journey can be a lonely one.

I wanted to continue on this path, looking at the connection between finances and the journey toward parenthood. Dealing with my own struggle through an ectopic pregnancy and salpingectomy, I was amazed at how many people shared their own stories – people I’d known for years yet who had never spoken of it before.

Now let’s talk about adoption, a route that couples struggling with infertility sometimes take. Although adoption has been part of human history since essentially the beginning, the process remains complex, lengthy and expensive, which can all make it emotionally disorienting.

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The contingency framing of “just adopting” if we can’t get pregnant doesn’t mesh neatly with this intense, demanding journey. Adoption takes as much intention as anything else.

The (Often) High Price Tag of Adoption

There are a few different approaches to adoption, each with its own costs and timetables. The common denominator is that they are all complex and high stakes – there is no “easy” version, nor is there a free version. But the difference you can make in the life of a child and your family is incalculable.

Through the Foster System – Least Expensive

Adopting through the foster system has several financial aids available, which can drive the cost down to little or nothing. Government programs, tax deductions and ongoing aid with food and clothing help to make this possible for families.

Finances don’t present the variables with this option, it’s more a question of your calling and vision for parenting. Additional aid is available for children with special needs, such as mental and/or medical issues. It’s also available for special circumstances, such as sibling groups who need to stay together. But these aren’t easy paths by any means, and you have to clarify your purpose and hopes for parenthood before you make a decision.

Eric Phelps, an attorney specializing in adoption who adopted two children himself, says one of the variables here is the termination of parental rights. This can be a matter of a putative father (person who claims to be the father without an established legal relationship to the child) coming out of the woodwork and contesting custody at the 11th hour. There can also be judges along the way who impact the process because they have differing philosophies on parents’ rights and adoption precedents within the legal system. This could all mean more expensive court time and even the possibility of the whole adoption falling apart.

On the purely financial level, much of the aid available is through reimbursement, which can make for an expensive waiting period, and the reimbursements are usually not available until the adoption is finalized. Also, applying for grants and other programs can be deceptively complex.

Agency Adoption

Alliance Adoption, Adoptions Together, Adoption for all Nations, Nightlight Christian Adoptions – all adoption agencies have encouraging, beautiful names because they do mission-driven work. These agencies match potential parents with pregnant mothers, as well as matching children in need with families.

The costs vary, sometimes widely. They include the birth mother’s medical expenses, legal fees for adoptive and birth parents, as well as social worker home evaluations and fees. The cost range is usually somewhere between $20,000 to $45,000, and the process can be long, with social workers vetting the home environment, criminal and psychological background checks and other factors.

Agencies will often have financial requirements, although these vary. Some will check credit scores and debts, including student loans and credit card bills. The Datz Foundation adoption agency of North Carolina states, “...the social worker is going to review your tax returns, look at your pay stubs, and review letters from your employer stating your current wages,” proving your ability to remain above the poverty guidelines for family size.

There’s one expense here that we may not think of right away: marketing. Yes, marketing. Finding a birth mother who is the right fit is not a guarantee, nor is it without its own costs. Advertising on websites and other places can be very expensive, depending on how much a prospective couple wants to invest.

Independent Adoption

Independent adoption, also called attorney-assisted adoption, is done outside the agency system, independently with an adoption attorney. The total cost can be as low as “about half,” said Phelps, but can be higher depending on where you live.

In independent adoption, an adopting couple will usually have a relationship with an expectant mother, and work through the legal and medical process with an attorney. This is done without the guidance and connections offered by an agency and is therefore usually cheaper. One specialist compares it to selling a house on your own versus using a Realtor.

The legal process will be similar, using social workers and doing background checks to vet parents. There are strict laws around the finances involved to ensure the prospective parents are paying only for direct expenses and not essentially paying for the child.

The regulations around this process are understandably complex, and in the independent scenario without an agency, much more of the burden for due diligence is on parents. The costs can also be less certain than with an agency if there are prolonged legal issues or other variables.

International Adoption – Most Expensive

Finally, intercountry adoption, famously the choice of Angelina Jolie, Julie Andrews and others, is usually the most expensive option. Weighing in anywhere from $20,000 to $50,000, this process is the most complex and can involve more pitfalls than the others.

Fees and legal processes vary widely depending on which countries and which institutions are involved – private agencies, orphanages and other places. America World Adoption, for example, describes the requirements for adopting from China, including that you must have at least $80,000 in assets, less than two divorces (per spouse) and even has rules about your body mass index.

Travel is another expense unique to international adoption. Again, this varies widely depending on the country and the case involved. One couple told their story of staying in South Africa for six weeks while they waited to adopt their son. Yet even before this travel period, there’s a longer application period that can take one to five years to complete. These waiting periods are expensive, financially and emotionally.

The upside of most international adoption scenarios is a reasonable amount of certainty for the outcome. Phelps, who adopted his daughter from China, says, “There’s a child at the end of the process. There’s some level of financial certainty. All others are entirely contingent on the termination of parental rights.” Instead of depending on a family scenario, international adoptees are usually matched with families through the country’s orphanage system.

Ways to Help Pay for Adoption

As you can see, the adoption process is neither simple nor cheap, but there are a few strategies you can engage to help defray the cost and make the dream of adoption more possible.

The Adoption Tax Credit

This applies to all methods of adoption and is similar to the child credit given for naturally born children. The credit is currently $14,440 and is adjusted every year for inflation. It’s also subject to phase-out rates at certain income levels.

Grants and Loans

Organizations such as the National Adoption Foundation offer access to special grants and loans for the adoption process. You might also find help through a service like Your Adoption Financial Coach, which can help you find funding as well as help you improve your financial picture for a home study in the adoption vetting process.

Borrowing from Yourself

Chances are if you’re in the adoption process, you’re in your 30s or 40s. You probably don’t have $40,000 just laying around, but you may have enough in your 401(k) or another account to take a loan against it. This is by no means a preferred scenario, but you may be in a part of your life/career where you can reasonably hope to recoup these losses in the future.

Employer Assistance

Some employers offer assistance to parents whether through financial assistance or reimbursement and paid/unpaid leave. Prospective parents should check into benefits offered. Another benefit you might not think of: time off from work. Just like parents with maternity and paternity leave, adoption leave allows you time to bond with the child and navigate this life change — if you work for a covered employer, which includes public agencies and private sector employers of 50 or more people.

Adoption Is Its Own Calling

Anyone who has raised kids will tell you it’s an amazing experience complete with overwhelming joy and sometimes unbelievable pain. It’s one of those life experiences so emotional and complex that it can only be referred to as a “calling.”

Adoption is its own calling. Far from “just the next alternative” after struggling with infertility, adoption is a unique journey that not just anyone can take. That said, it’s a phenomenal opportunity to change a child’s life and your own forever.

As I’ve put together this article, I’m encouraged with how many resources, coaches and just plain well-wishers are out there to help through the adoption process. If you feel called to adopt, don’t let the complex price tag be your only consideration. There’s a huge network of support out there, it’s just a matter of knowing where to look. Know your options, do your homework and go forward with your whole mind (and heart).


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Erin Wood, CFP®, CRPC®, FBSⓇ
Senior Vice President, Financial Planning, Carson Group

Erin Wood is the Senior Vice President of Financial Planning at Carson Group, where she develops strategies to help families achieve their financial goals. She holds Certified Financial Planner, Chartered Retirement Planning Counselor and Certified Financial Behavior Specialist designations.