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Retirement advice in America often follows a familiar path: work hard, raise kids, retire, make a living. But what if you’re not following that script?
For the growing number of Americans without children, retirement planning may look fundamentally different. Without heirs to support or inherit assets, there are different expectations for decisions related to spending, estate planning and long-term care. Here’s what financial planners say people without kids should do differently.
1. Rethink the entire retirement structure
Standard retirement models are often built around inheritance planning and avoiding running out of money at all costs. This mentality may not be suitable for people who do not have children.
“Child-free people follow the FILE (Financial Independence, Live Early) path rather than FIRE,” said Jay Zygmont, CFP and founder. Childfree Trust.
If FIRE (Financial Independence, Retire Early) and classical retirement are an “on/off switch for work,” Zygmont said FILE is “a dim switch” with a focus on “doing the right things at the right time, throughout life.”
He said many child-free people take a “dying with nothing” approach, rather than transferring intergenerational wealth.
Being child-free also changes perceptions regarding withdrawal. Common rules such as the 4% safe withdrawal rate and Monte Carlo simulation are designed to avoid losing money. For child-free retirees, Zygmont recommends a safe withdrawal rate of at least 5%.
2. Make spending fit your life – not an inheritance
Zygmont said that without children, retirees may have more flexibility in how and when they spend, but it must match their goals. For example, for people who do not have children, renting a home is often better than buying because it prioritizes flexibility.
Joseph M. Favorito, CFP and Managing Partner Landmark Wealth Management, LLCsaid that when legacy planning is not focused on, “you can potentially overspend if you have the assets to do so.” Still, he cautioned that “there are constraints on the amount of allowable spending annually as a percentage of your liquidity.”
According to Pamela Garrett, a property lawyer and owner, one of the things you need to set aside money for is money for carers. Law Mother Asset Protection and Estate Planning“Since you won’t have adult children to step in as caregivers and helpers.”
3. Appoint someone to make decisions for you
The irony, Zygmont said, is that having no heirs may make estate planning more urgent, not less.
His company recently surveyed 600 people without children about estate planning and long-term care plans. The study found that only 19.9% of child-free people have a will, he said, and only 14.6% have long-term care insurance. Retirees are required to designate a guardian or conservator to make decisions for you when you cannot.
Without children, create at least one beneficiary list to ease the work of settling the estate for whoever is responsible, Favorito said.
4. Make a long-term care plan early
The most common question child-free adults hear is who will take care of them later, Zygmont said. He encourages clients to create a long-term care plan by their mid-40s, which includes “both how to pay for it and an estate plan that outlines who makes decisions for you when you can’t.”
“Assuming this type of care would be required, no,” Garrett said. “You need a coordinated plan.”
5. Focus on tax efficiency throughout your life
Without taking the next generation into account, tax planning shifts toward maximizing what you use, not maximizing what you leave.
Garrett recommends prioritizing tax efficiency during your lifetime. This may look like Roth conversions or the charitable deduction and the timing of your withdrawals.
“Your goal is to change what is useful in life, not what is left.”
6. Don’t assume planning is easy
Zygmont points out that while life may be a little easier without children, planning for retirement doesn’t have to be. Traditional advice holds, “Get married, have kids, work 25 years, retire, and divide the wealth.” If a planner says child-free planning is no different, Zygmont recommends finding one who understands it is different.
Retirement planning is still a goal-based plan.
“Everyone has different goals, with or without kids,” Favorito said. The key is to make sure your plan reflects your particular path.