Listen in or watch as host David Mandell interviews financial advisor Jay Zigmont PhD, MFA, CFP®, the CEO of Childfree Wealth. David begins that he had read’s Jay first book and was extremely interested in the topic—as he and his wife Sheila do not have children.
(Video Available January 8, 2025 at 6 AM Eastern)
David and Jay then discuss Jay’s background and how he came to direct his career around helping child-free clients. Jay then shares some statistics from various studies about the prevalence of childfree people and how this demographic is growing rapidly. David and then dig into the various ways traditional financial planning misses the mark for childfree people – working backwards from estate planning to present day financial decisions. David makes the point that even folks with kids or grandkids can learn from tactics that childfree people use often.
Jay then provides to David and the audience a few resources that childfree people can utilize if they are interested and concludes with Jay emphasizing the importance of community.
TAKEAWAYS:
Takeaway 1: Child-free people have unique financial and estate planning needs that are often overlooked by traditional planning advice.
Dr. Jay Zigmont, founder of Childfree Wealth, sheds light on the specific financial planning needs of individuals who choose not to have children. Zigmont emphasizes that child-free individuals make up a significant proportion of the population, and yet their specific financial planning needs are often overlooked in favor of traditional family-centered models.
Zigmont notes, “Childfree Wealth is the first life and financial planning firm dedicated to serving child-free people.” He further expands on the point, “About 25% of the US are child-free or permanently childless. So, we’re talking about a huge, huge population.” He goes on to explain that the traditional financial model, built around the idea of building wealth to pass onto the next generation, often doesn’t apply to child-free individuals, “Most of my child-free clients passing on money, the next generation is not a goal.”
Zigmont argues that financial planning for child-free people should be centered around the individual’s life goals and aspirations, rather than traditional retirement and estate planning goals. For instance, he highlights an approach called Financial Independence Live Early (FILE), which encourages individuals to focus on investing in their life and their passions, rather than saving for retirement or building an inheritance for the next generation. “For child-free folks, we know we have to figure it out. We just have to,” Zigmont stated.
Takeaway 2: Child-free individuals may face unique challenges in their later years, particularly regarding long-term care and end-of-life decisions.
Zigmont discusses the unique challenges that child-free individuals may face in their later years, particularly when it comes to long-term care and end-of-life decisions. Without children to rely on for support or decision-making, child-free individuals often need to make detailed plans for their own care.
Zigmont points out, “The soloist is what we call them, the single no kids. It’s the hardest. In actuality, long-term care is most expensive for single women. So, there’s a whole bunch of issues there. But my goal with my clients is to have a plan for their long-term care by the time they’re mid-40s.” He further emphasizes, “The bigger problem is who’s going to make the decisions for you. So, that’s the executor, financial power attorney, medical power attorney, guardian if needed, whatever it is. And for the docs here, you’re familiar with the system, okay? It’s all based on next of kin. And if there’s no next of kin, you’re screwed.”
Zigmont argues for the need for more robust solutions for child-free individuals, such as professional fiduciary services that can step in to make financial and medical decisions on behalf of the person if needed. He explains that they were working with a trust company to launch a product that would provide these services, filling a significant gap in the market for child-free individuals.
Takeaway 3: There’s a growing trend of people choosing to live child-free, and this group faces unique financial and lifestyle challenges that traditional financial planning often overlooks.
Jay brings to light the growing trend of people choosing to live child-free and the unique financial and lifestyle challenges this group faces. Zigmont’s insights highlight how traditional financial planning often overlooks this group, failing to consider their unique circumstances and needs.
“We were all dumb at 18, and you’re still on it. Do you really want to do that for 40 years? They’re like, ‘No.’ Well, what do you want to do? What’s the impact you want to make? What’s the legacy you want to make? What do you want to do with your life? And it is amazing because nine times out of 10 they go, ‘Well, nobody’s ever asked me that,'” Zigmont shares, emphasizing the importance of personalized financial planning that takes into account individual lifestyle choices and preferences.
Zigmont also discusses the need for solutions that cater to child-free individuals, particularly in terms of long-term care and decision-making in the absence of next of kin. He highlights the potential for professional fiduciary services that could step in to make financial and medical decisions on behalf of individuals, demonstrating the potential for innovation in financial planning to cater to child-free individuals.
INSIGHTS
- Childfree Wealth Defined: Childfree Wealth caters to individuals who do not have children by choice or circumstance, representing a significant and underserved demographic in financial planning.
- 25% of the U.S. Population is Child-Free: Research indicates that 25% of Americans are child-free or permanently childless, highlighting a large, often overlooked segment of the population.
- Lack of Representation in Financial Planning: Traditional financial planning is geared towards families with children, leaving child-free individuals with advice that doesn’t align with their unique needs.
- Financial Impacts for Child-Free Individuals: Child-free people often focus less on wealth transfer to future generations and more on living fulfilling lives, with different priorities such as disability insurance, long-term care, and lifestyle investments.
- Higher Net Worth Among Child-Free People: Research from Pew shows that child-free individuals tend to have higher net worth, and gender pay gaps are significantly reduced within this group.
- Challenges in Estate and Long-Term Care Planning: Child-free individuals often lack natural caregivers or next-of-kin, making long-term care and end-of-life decisions more complex and requiring unique financial planning solutions.
- Societal and Political Misconceptions: There is a societal expectation that people should have children, with child-free individuals often judged or misunderstood for their choice.
- Increasing Child-Free Population: Younger generations are more likely to question traditional life scripts, such as having children, leading to a growing percentage of child-free individuals annually.
- Financial Planning Philosophy: For child-free individuals, the focus shifts from accumulating wealth to support descendants to strategies like the “die with zero” concept, emphasizing meaningful experiences and personal fulfillment.
- New Resources for Child-Free Individuals: Dr. Zigmont is working with a trust company to create services that act as financial and medical power of attorney for child-free clients, addressing the lack of next-of-kin options.
- The Importance of Community: Child-free individuals are increasingly forming intentional communities for mutual support, travel, and shared interests.
- Child-Free Retirement Trends: Instead of traditional retirement, child-free individuals often pursue partial work, passion projects, or flexible lifestyles under the concept of “Financial Independence Live Early” (FILE).
- Dr. Zigmont’s Upcoming Book: His new book, The Childfree Guide to Life and Money, aims to fill the gap in financial literature for child-free individuals.