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May 19, 2022, 2:17 p.m. EDT

‘Who is going to take care of you when you’re old?’ Childfree retirement planning answers the questions all of us should be asking

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By Leslie Albrecht

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Similarly, Kelley Long, a certified financial planner and CPA in Arizona with many childfree clients, says much of her work involves “setting people up to feel comfortable taking certain risks with their earning possibilities that parents don’t necessarily get to do.” Those risks can include quitting your job with no plan for a new one and trusting that the money you’ve saved up will be enough until you find your next job or income source. 

Long, who is married and childfree herself, calls this temporary break from working a “mini retirement.” She recently took one herself as a way to recalibrate how she spent her time and to work on building a new financial coaching business. 

“Most people don’t ever think of just stopping saving for a couple of years,” Long said. But for childfree people, “if you have a decent amount of money already saved and you stop and let it ride and go live in a van in the desert, the impact isn’t as great.” Long and her husband are in their mid-40s, and were pleasantly surprised to learn from their financial planner that in five years time, they could both cut their earnings in half and still die with millions of dollars. “Will we go part time in five years? I don’t know. But the possibility is amazing.”

While the pandemic has retooled many people’s aspirations about where they want to live and how they want to work, this societal-norm-challenging movement appears to be growing as well, as more U.S. adults are saying they don’t expect to have children. Last year, the U.S. Census Bureau released a report highlighting America’s “growing childless older adult population.” It showed that 16.5% of Americans age 55 and older, 15.2 million adults, are childless. Some say it’s for financial or medical reasons, others are worried about climate change, to name a few of the cited reasons in a 2021 Pew Research Center survey . Pew noted: “44% of non-parents ages 18 to 49 say it is not too or not at all likely that they will have children someday, an increase of 7 percentage points from the 37% who said the same in a 2018 survey.”

FILE, not FIRE

Childfree people are a “rather large under-represented minority,” Zigmont, the childfree certified financial planner, believes. “Part of that is because it’s a hard topic,” he said. He started advertising himself as a childfree financial planner in 2021 and so far, he hasn’t seen evidence of the specialty becoming popular with financial planners. Discussions about being childfree can quickly get emotional and bring up complicated feelings about life choices. People on both sides can feel judged and defensive. When Zigmont ran online ads for his upcoming book “Portraits of Childfree Wealth,” two Reddit users reported the ads for “promoting hate speech based on identity and vulnerability.” 

Childfree people are better-positioned to follow what Zigmont calls FILE, which stands for financial independence, live early, a variation on the popular movement known as FIRE, financial independence, retire early. Whereas FIRE is about retiring completely, FILE is “more of a dimmer switch for work,” Zigmont says. It could involve a scenario where someone cuts back on work so they can pursue a passion project, like opening that cupcake shop they’ve always wanted to, or that animal rescue. People with kids can try something like this, of course, but it’s harder. There’s also a path that Zigmont says childfree couples can follow that he calls “the gardener and the rose,” where a couple lives off one income and takes turns being the one who is “blooming” (following passion projects) and the one who is providing support (the gardener).

With both FILE and the gardener and rose scenario, Zigmont says, “it’s a different set of planning than, ‘Hey, I just want to retire as soon as possible. It’s going to change which accounts you use, it’s going to change your investment strategy, it’s going to change your tax structures.” 

To help clients move toward FILE, Zigmont recommends Roth accounts, where account holders pay taxes on the money going into the account but not when they take it out. To his mind, a taxable retirement account can make better sense than a traditional one for childfree people who aren’t planning to pass on their money to the next generation, because they’ll pay capital gains but not income tax rates, which tend to be higher. Another benefit to a Roth account for people pursuing FILE: they can withdraw their contributions when they need the money (as long as it’s been in the account for at least five years), sometimes decades before traditional retirement age.

One misconception about childfree people is that they don’t need to do any financial planning, said Christine Moriarty, a certified financial planner and founder of Money Peace in Bristol, Vt. But planning is still important, even if you don’t have dependents and your cash flow is relatively strong and steady, she said. Moriarty, who doesn’t have children herself and works with many same-sex couples who are childfree, recommends making a solid estate plan. Choose a back-up executor and another back-up on top of that. “I don’t think there’s anything wrong with having three executors,” she told MarketWatch. 

When planning for retirement, childfree people may have more flexibility when deciding where to settle down, because they’re not factoring in the location of children and grandchildren. One of Moriarty’s childfree couple clients spent five years exploring the U.S. in an RV before deciding to settle in Arizona. Another consideration more common with childfree people is picking out a nonprofit to leave money to in a will. “They’re thinking, this is my legacy. It’s defining legacy differently,” Moriarty said.

There can also be a need to help childfree people set financial boundaries and play defense against family members who make assumptions about their cash flow, Zigmont says. He’s written a list of financial-themed bingos that clients may encounter, such as, “You don’t have kids, so you can afford…” or “Since you don’t have kids, you should help me pay for mine…” As Zigmont tells his clients, “It is amazing that family and friends have plans for how to spend your money…If you even once give in, you become a bank for everyone.”

These presumptions can also take the form of assuming a childfree person will take a more prominent family role care for aging parents, especially among siblings, he said. “It’s really hard to say to a family member, ‘Hey, I’m not going to give you any money,’” Zigmont said. He added later, “I spend a lot of time with people telling them they don’t have a vote in your life — same as you don’t get a vote in theirs.”

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