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A podcast designed to help retirees and those nearing retirement navigate finances and life planning with expert insights from financial advisor Trevor Lawson. Tune in for practical strategies and inspiring ideas to ensure your retirement years are purposeful, fulfilling, and truly your best chapter yet.
*Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth. Branch phone: 919-546-0400.
Trevor Lawson: [00:00:00] Welcome to The Retirement With and On Purpose Podcast. I'm your host, Trevor Lawson, and this show is all about helping you not just reach retirement. But truly thrive in it. You've put in the work. Now let's make sure you can enjoy every moment to the fullest.
Today's episode is how to plan for retirement when you don't have kids. And the inspiration for this episode is twofold. One, several. Clients of mine are either retired or approaching retirement, and we're thinking through some of the unique dynamics for folks in retirement who don't have kids. Things such as who to make the key players in their estate plan, which we'll talk about today.
And I'm gonna quote several advisors [00:01:00] throughout today's podcast. But this article can be found on AARP's website and it was originally written by Tamara Holmes. So let's jump in. 23% of adults in their fifties and 22% of those in their sixties have never had children. A July 20, 24 pew research analysis shows those numbers are likely to rise according to the same study.
The share of childless people, ages 18 to 49, who say they are likely to stay. That way increase from 37% in 2018 to 47% in 2023. So today's content is not only relevant, but it sounds like it's gonna become even more relevant as more and more people are opting not to have children. So financial advisors warn that even if you do have kids.
There's no guarantee they will be able or willing to support you in retirement. The [00:02:00] safest way to approach retirement is to plan as if you'll be on your own. Here's some things to do if you don't have children to fall back on. So certainly for people that don't have kids, but again, the safest approach to retirement is to not rely on anyone.
So. For those of you listeners that do have kids, a lot of what we're gonna talk about today is still applicable, but that much more applicable to those that don't have children. So the first thing is going to be to build a support team quoting here. The big challenge for child free people is who makes the decisions for us when we can't?
It says, Jay Zig Manas, certified Financial Planner. I'll use my wife and I as an example. It says, Jay. Who is child-free? If we get in a car crash, who's going to make our medical decisions? Who's going to make our financial decisions? That's stuff that a next of kin would normally do. Think about who among your extended family or close friends might be able to serve as your power of attorney or healthcare proxy.[00:03:00]
Look for someone your age or younger in relatively good health and ideally living nearby. So that's the key point here when you're thinking about building your support team and thinking about who might be that power of attorney or healthcare proxy, ideally should be someone that's your age or younger and in good health and that lives nearby.
Because oftentimes when something does happen, these roles do come with, you know, some inevitable responsibility as part of the estate. Settlement or a state management process. And it's much easier from a logistical standpoint if this person is, is in good health and, um, in close, close by to where you are geographically.
Quoting again here, child-free people tend to have really strong bonds with their nieces and nephews, and in many cases it's the nieces and nephews who step up as caregivers says Jane. She suggests helping nieces and nephews financially as parents might do for their children. It's this kind of thinking that creates a [00:04:00] strong bond.
So nieces and nephews could be for many of of you all who do not have children, uh, potentially a logical option for those healthcare power of attorneys, financial power of attorneys. You might also consider engaging an aging life care professional. Jay says, these providers, sometimes called geriatric care managers can help clients address health, financial, and housing concerns, and access caregiving and other services.
So for those of you that may be having a close friend or family member close by or who's, who's younger, is not an option. I would consider looking into geriatric care managers as an option for these integral parts of your your estate plan. Finally here, don't wait until you need help to seek it. Talk to prospective proxies now to determine together if they are suitable and willing to take on those roles later in life.
Most importantly for those do that, do not have children when we're thinking about [00:05:00] retirement. Build a support team. Secondly, plan for long-term care. Again, this is appropriate for everyone approaching retirement, but just that much more, uh, appropriate for those who do not have children to fall back on for, for care.
According to the US Department of Health and Human Services, about 70% of people who reach age 65 will need long-term care at some point in their lives. So again, long-term care, critically important. We've talked about that in previous episodes. But that much more important for, for those of us who don't have children, to fall back on quoting again here.
We both help our parents a lot, and I always think who's going to do that for us says Stephanie, age 60, who retired two years ago from her job in management of the hospital. An ongoing conversation that we had early on was around long-term care. As Todd who works part-time as a consultant, what happens to us when we're older?
If our health should fail with less of a family safety net? Childless couples may have more reason to [00:06:00] consider long-term care insurance, and fortunately, there are more ways than ever to plan for long-term care. Again, I keep referring to it, but go back to previous podcast episodes, more information there.
But many employers now offer group long-term care coverage, and then there's a lot of hybrid long-term care policies available. So there's more ways than ever to plan, which thereby creates less excuses than ever to not have a formal long-term care plan in place as you approach retirement. Third piece of advice.
Consider aware and how you want to age. Aging in place is easier when you have an emotional and physical support nearby. One reason many older retirees choose to live close to their children and grandchildren. Childless people have similar needs, but may need to meet them on their own. Here are some steps to consider earmark funds for housing needs.
So for those of you that do want to stay in your own home. You may want to think about just having [00:07:00] funds earmarked for modifications to the homes. So this article suggests things like a ramp or walk-in shower or to cover moving, moving costs if you do at some point have to relocate, whether for health reasons or other reasons.
So earmarked funds for housing needs. And if you decide not to stay and age in place, think about continuing care retirement communities as an alternative. I'll reemphasize how impressed I am with continuing care retirement communities and for those that do not have children, this is a wonderful way to maintain social engagement throughout retirement, which leads to the.
The fourth recommendation here, save up for social needs. If you anticipate aging alone, think now about how you might stay connected with others. So thankfully here in the triangle, Raleigh Durham, chapel Hill, where we're located, you've got a lot of, a lot of different ways to stay engaged [00:08:00] with people in retirement.
Um, there's lifelong learning programs at some of our universities. Where people age 50 and up can go and take courses at the university. There are travel groups now that are designed for people in retirement, so there are more ways than ever to to to, to maintain engagement in retirement, but it oftentimes comes with a price tag.
So save up for social needs. Final two items, supersize retirement savings. So federal researchers estimate that parents spend more than 230,000. On average raising a child to age, age 18. In the ideal world when we say supersize retirement savings, it could be helpful to put the money that you would've spent on kids away for your own retirement.
Um, again, that's, that's obviously ideal, but could certainly help supersize your retirement savings and ensure that you know there's a better chance you've got additional monies available for housing and, and social needs as time goes on. Finally [00:09:00] think about your legacy. So estate planning quoting here looks different for people without children.
They may have more disposable income because they haven't had to pay child rearing costs, but they may also feel less urgency about what happens to their wealth when they are no obvious heirs. So being proactive in estate planning is especially important for couples who don't have children. Irwin is quoting here because absent a will.
State intestacy laws will determine who inherits your assets. So if you don't take it upon yourself to determine what you want to happen to your monies, when you're no longer around, then the state does that for you. Oftentimes that just really lets a, a great opportunity to, to pay it forward to organizations or, you know, places that have had a profound impact on, on your life.
This could be a chance to really, uh, bequeath some of those assets to, to causes or organizations that [00:10:00] you care about. So we may want to benefit our alma mater. We want to benefit charitable organizations that we're passionate about. We want to benefit friends or maybe a niece and nephew. Quoting this is critical for them because the default almost certainly doesn't reflect they would what they would like to have happen.
So there's a number of different. You know, individuals or organizations who could, um, be a part of your estate plan. But it it, it takes some proactive planning to make sure that your intentions are aligned with the appropriate estate planning documentation. So this is. Again, designed to be food for thought as always, but for those that do not have children, it creates a unique planning opportunity for you all to think through some of these key items that we talked about today.
Until next time, stay well and I'll look forward to being with you again soon. Take care.
Thanks for tuning in to The Retirement With and on Purpose podcast. I hope you're walking away with [00:11:00] new ideas. And a fresh perspective on how to make the most of your retirement journey. And remember, retirement isn't the end. It's your time to live with purpose. Until next time, I'm Trevor Lawson. Here's to a fulfilling and thriving retirement.