Does Having Kids Actually Make Retirement Less Scary?

The DINKs are feeling like a couple of duds right about now.

No kids means no college payments, no extra mouths to feed and no ludicrous schedule of baseball, travel soccer, clarinet recitals, ballet and (sigh) Fortnite lessons. Interestingly, though, childless Americans are feeling a bit more worried about their retirement than all the moms and dads out there. Some 72% of American parents feel confident in their ability to meet their savings goals for retirement, compared with just 54% of those without kids, according to an Allianz survey.

Not that advisors are pushing clients to start families, but it often acts as a wake-up call for many. “Having children naturally gives us a longer-term, multi-generational outlook on life,” said Jeffrey Walters, founder of Advisia Financial Planning. “It causes clients to start planning earlier and more comprehensively.”

The Parent Trap?

Today, it costs more than $300,000 to raise a child over the course of 18 years. It’s figures like that, along with rising inflation and the high cost of long-term care, that’s causing a lot of Americans to delay starting families. However, not having kids could actually be worsening people’s financial anxieties and retirement preparedness.

The survey also found:

• Some 62% of Americans without kids do not have a written financial plan. Meanwhile, more than half of parents do have a plan.

• There is a bell curve, though, to the number of kids parents have in relation to their retirement confidence. Parents with one to two children are more likely to feel confident versus those with three or more.

Adults Just Want to Have Fun. Parents will often say something like: “I haven’t gone to the movies since I’ve had kids,” and there is truth to that. Despite some good saving habits, Thomas Rindahl, an advisor with TruWest Wealth Management, noted that his childless clients tend to spend more freely and have more luxurious lifestyles than his parent clients. “The question becomes whether they can maintain that lifestyle,” he said.

Not having kids may lighten the load now, but it could create concerns as clients approach retirement, said Bryan Byrer, founder of Millennial Financial Planning. “Sometimes we have trouble thinking about our future selves, but it’s hard to ignore the gray hairs or how your body feels,” he told Retirement Upside. At that stage, people start worrying who exactly they can lean on both financially and socially. “People say, ‘When my friends pass away, I’ll always have family,’ but what happens when you don’t have kids?” Byrer said.