By Adam Safdi, WCI ColumnistOn my 18th birthday, after my mother (may she rest in peace) outed me as gay, the first thing she said was, “But I wanted grandchildren!” She said it as if somehow being gay means I’m sterile or that I cannot have children. Many LGBT folks have children in a variety of different ways—IVF, surrogacy, foster care, and adoption.
In the next two decades after my 18th birthday, I considered many of these options. In fact, my husband and I fostered a child, but it did not lead to an adoption. The failed foster experience led to a personal revelation, and my mother’s premonition proved to come true—just like many people, both gay and straight (and especially people of the younger generations), I made a choice that I do not want children in my life.
Some people feel that part of their personal calling is raising children. I hope that you, as the reader, can still glean some good lessons from this column, even if it doesn't exactly describe your situation.
The conscious choice to not have children is often referred to as childless by choice or childfree by choice. You do not have to identify as LGBT to identify as childless by choice, but there is often a feeling of “otherness” or queerness that comes with making this decision. People choose not to have children for many reasons, ranging from financial to medical to concerns about overpopulation and the state of the environment. The heteronormative expectation of adulthood is to grow up, meet a partner, have babies, raise these children, and send grown kids off on their own. Then our adult kids take care of us when we get old.
Those of us without children do not fit this mold and must make our own path. It is prudent to consider finances when living childless by choice.
However, I first want to address one of the true fears we have to acknowledge when living childless by choice, and that is how will we die with grace and dignity. For my fellow medical professionals who care for adults, think back to the last time that you cared for someone without a next of kin or designated healthcare power of attorney. Think about if you felt sad, disappointed, angry, shocked, worried, anxious, or full of pity. Was the patient incapacitated and had no one to help define goals of care, so maybe you were forced to assume the patient is full code and continue aggressive treatment when you thought it might be futile? Perhaps the patient died without next of kin, and there was no direction on what to do with the body. Maybe the patient could have been an organ donor, but there was no one to give consent for that.
Whatever the emotions might have been, I imagine we all feel some way for those without children. While it is not a financial task that WCI Founder Dr. Jim Dahle included in his big five, I urge all of us, especially those of us who are childless by choice, to have our affairs in order. By this I mean we should have a legal power of attorney, healthcare power of attorney, defined and written goals of care, and an estate plan.
Jim has written before that there are five financial tasks to accomplish in life—earning, saving, investing, spending, and giving. Let's examine each of these through the lens of childless by choice to see if there are any differences.
#1 Earning
For medical professionals, the first job where we earn money as physicians is residency. The match process decides that first job. There are three factors to consider when ranking residency programs—the people (you want to fit in with your colleagues), the quality of education (you want to become the best doctor you can be), and the location. But when one is childless by choice, the location might not matter as much. You might not need to be around your parents because you won’t need free childcare. Or maybe you DO want to be around your parents because they’re much older or frail, and it’s important for you to be with them. My point is that there is more freedom in choosing the location when you don’t have to factor in your own children.
Similarly, when choosing a job after residency, you can take advantage of reverse geo-arbitrage. You don’t have to live in a big city. You don’t have to live in a good school district. You can choose to live in a smaller town or a rural area, and you often end up making more money because of the greater need for good doctors. You could use the reverse geo-arbitrage as part of your student loan repayment plan if maybe you plan to make a lot more money for the first 5-10 years out of residency and then make a conscious decision to move to a bigger city once your debts are paid.
My husband and I moved from Chicago to northern Nevada shortly after I finished my training. Nevada ranks poorly in K-12 education, but we increased our household income more than 2x by making this move. We knocked out student loans in two years, and we are working toward getting our mortgage paid off in nine years. If you are considering moving from one city to another, you might not need to focus on the GreatSchools.org score. (Special plug for Reno—beautiful mountains and Lake Tahoe nearby, four seasons, little traffic, friendly doctors. Come on down!)
More information here:
Do I Need to Come Out of the Closet to My Patients?
#2 Saving
I think this is where the biggest difference lies between folks with children and folks without children. The amount you save is the difference between what you earn and what you spend. When your fixed and variable expenses are less, you can save more. Guess what costs a lot of money? Raising children. The USDA has released a report that it can cost several hundred thousand dollars to raise a child, estimating it costs approximately $12,980 a year in 2015 dollars ($17,205 today) for a middle-income ($59,200-$107,400), two-child, married-couple family. It costs more in urban areas than in rural areas. Most of those costs go to housing, food, childcare and education, and transportation.
If that $12,980 per year were invested in a taxable account earning 7% a year, it could be worth $365,186 at the end of 17 years, and if you let that money coast for 13 more years without adding anything in addition, it could grow to $688,681 (assuming some things such as 2.9% inflation and a 24% federal marginal tax rate).
When we lived in Chicago, we had a small two-bedroom apartment. We didn’t have to worry about extra bedrooms for children or moving out to the suburbs to get a bigger house and suffer a longer commute. The task for those of us who are childless by choice is to make sure that we don’t spend too much money on ourselves and that we actually continue to save. But without the expenses of raising children, it should be easier.
#3 Investing
I was fascinated by Chris Davin’s 2024 WCICON talk and subsequent podcast interview. He took a deep dive discussing the pros and cons of investing in traditional/pre-tax accounts, such as a workplace 401(k), vs. Roth/tax-free accounts, such as a Roth 401(k). He examined and discussed many factors that could affect your decision, such as planning for early retirement or whether you are planning on giving money to heirs or a charity when you die.
I don’t think there are major implications or differences in investing strategy (i.e. choosing your investment portfolio) when you are childless by choice. But I do think that for the charitably inclined childless super savers who are saving 30% or more of their income into a combination of all three account types (pre-tax, taxable, and Roth accounts), it makes sense to live off taxable and Roth accounts in retirement and to name your favorite charities as the beneficiaries of your pre-tax account. The reason is that during your earning years, you defer taxes on the earned income that went into the pre-tax account, and when you die, the charities also do not need to pay taxes on the inherited amount. If we’re not going to pay Uncle Sam, let’s do it for a good cause!
As Davin pointed out in the podcast interview, early retirement (a time of little or no earned income) might be a time when you deplete a traditional 401(k) and make Roth conversions—as long as you have enough funds to sustain you in other pots of money, such as your taxable account. This might help beef up Roth accounts for those who are childless so there isn’t as much anxiety about giving away an entire traditional 401(k) to charity.
#4 Spending
Of course, you should save enough money to meet your retirement goals. But then spend extravagantly on the things you love. Like flying first class? Do it (I feel zero guilt for buying a business class lie-flat ticket for overseas flights). Like taking luxury cruises? Do it. We recently took a luxury cruise to Alaska, and we were among the youngest passengers on the ship, as many don’t take such a cruise until late into their retirement. We also could exploit our youth and enjoy more outings and adventures than those passengers who were in the more feeble eras of their lives. I’m so glad I could physically hike along a glacier and ride a zip line down a mountain in Alaska.
Consider helping out your partners with children by scheduling your vacations separate from peak school break times. You might get a better deal traveling somewhere tropical if you go in early February or November when most kids are in school rather than the typical spring break or December holiday break.
More information here:
#5 Giving
When you are childless by choice, you have a lot of freedom to give money away. You can give to a charity, such as a religious organization, or to an organization to save the environment, both of which are usually nonprofits. Please see WCI's guide on How to Choose a Charity. You can give to a political cause if you wish, but be advised you can’t use a donor advised fund to contribute to a political cause. Finally, you can give individually to people, including other members of your family. In 2024, the maximum amount you can give to a single person is $18,000, above which there are gift tax implications. But if you’re married, you and your spouse can separately give $18,000 to a person. If the recipient is married, the recipient’s spouse can also receive $18,000 from the donor and the donor’s spouse. So, for a married couple giving to another married couple, that’s $72,000 that can pass without any gift tax implications.
I have written previously about how LGBT folks build their own chosen family through life, and that family is just as important at the end of life as it is when one is coming out of the closet. While it’s not a financial task, it is essential to build that social network of dear friends. Children are so often the designated healthcare and legal powers of attorney when we age. For those who are childless by choice, we must find someone to whom we give those powers.
Gay or straight, you might have felt pressure to have children but ultimately decided not to do so. Partially because of living childless by choice, you have taken a different path toward future financial independence.
What do you think? If you're childless by choice, how have you structured your financial life? Are you closer to financial independence than you would be if you'd had children instead?
Early childhood education (ECE) has a significant impact on how they grow socially, emotionally, and cognitively, you know?
nice post Adam! I myself have 2 kids and it’s killing me and my wife financially (and mentally, I might add!). but it was a goal of ours and is a blessing, but you also mentioned this- they will likely be our main caregivers as our bodies and minds decline in old age. The financial costs of childcare are almost like paying for long term care insurance. Have you thought because you and your spouse are haven’t kids that you seriously have to consider long term care insurance?
Thanks Rikki. I think planning for our more frail years in the future (the “slow go” or “no go” years) is wise for everyone, but especially those without children. That planning might include long term care insurance or self-insuring for some kind of long term care by saving slightly more for retirement, maybe 30x annual spending vs 25x annual spending. I don’t think there’s one right answer because no one can predict the future.
I don’t think those with children can presume that the kids will take care of you as you age. Nice idea, but up to the child and fate/ luck. Rikki you should cover childcare AND consider long term care insurance (or build up enough ‘retirement’ savings to cover long term care).
Having just buried my mom and about to bury my mother-in-law (rough year except for the new granddaughter) I can assure you that the mom with money to stay at a nice independent living facility was better off than the one without who seemed best off living with us- until we could no longer adequately care for her and she moved to a nursing home she ended up not liking. And after that experience my kids have assured me they will not have (let) us move in with them.
The point that one’s children might not care for one when one is older (or opt to make choices in a way that the elder would not have wanted) is a great one. Sibling struggles can come into play as well when there are multiple siblings and disagreements about how end-of-life care should be implemented and managed. I saw that play out in my spouse’s family when my mother-in-law reached end of life. We are childless by choice and, in addition to completing the usual powers of attorney documents and the like, on the advice of our estate attorney have located and made arrangements with a licensed fiduciary to take care of us should one or both of us become unable to care and make decisions for us. We also knew of an elder physician with children who loved her two children but felt neither was especially well suited to care for her when she reached end of life and so she, too, contracted with an outside care manager to handle those aspects of her care. Obviously, if one opts to go this route then building and setting aside the financial resources to hire that type of assistance is crucial and should become part of one’s lifetime financial goals and planning.
This is the first time I have heard the term licensed fiduciary. How did you locate one?
We are also childless and have an estate plan.
We were advised by our estate attorney to find a fiduciary, given our situation (no kids and no distant relatives we would trust with managing our care should we become incapacitated/not competent to direct our own care). He indicated it is useful to have a fiduciary situated in the same county as us because the fiduciary would be familiar with the local courts and legal system. He isn’t in our county because he was my parents’ estate attorney and we used him to create our living trust, DPA, and healthcare directive documents. He suggested we ask trusted financial partners and friends for recommendations for fiduciaries local to us, so we asked our CPA, who recommended the person we wound up choosing as our fiduciary. As part of the process we spoke with one of her client couples who are also childless; they gave her a great recommendation. We then followed up to talk with her at length and felt very comfortable with her.
We’re located in Northern California. For anyone in California, there’s a professional association of this type of fiduciary, The Profesional Fiducary Association of California, which has a website with a searchable database of fiduciary members: https://pfac-pro.org/. I don’t know what the landscape looks like in other states. You might ask your estate attorney for advice.
BTW, a guest post from a licensed professional fiduciary describing what they do and how to find and choose one would be fantastic. 🙂
Good suggestion. We’ll see if we can get one.
Yes, please, to the guest post – would love more info on this!
Jenn,
Exactly what I was going t o say. There is no guarantee that your children will take care of you.
In fact, I think in most Euro-American cultures, it’s probably much less likely than in an Asian culture. While we’re not going to let our parents eat Alpo or anything, none of us are inviting them to move in or changing their diapers. My kids already assure me they feel the same way. So better clarify with them what you mean by “taking care of you” exactly.
“The conscious choice to not have children is often referred to as childless by choice or, for the women out there, motherless by choice.”
Motherless by choice: I do not think it means what you think it means.
Exactly my thought when I read that. Also, I personally prefer childfree to childless, but I’m also older and joined this tribe a long time ago, when we were fewer and further between than we are now.
I actually thought we were going to use that new preferred term in the article, but I think childfree pretty much = childless by choice. Just childless includes lots of folks with fertility issues and that’s certainly not the same thing.
Right, except every time he says childless, he says “by choice”, too, which still leaves out people it wasn’t a choice for. *shrug*. And “childfree” isn’t really new; like I said, I’m old, I was part of an online “childfree” group more than 20 years ago.
Yea, not sure I can get behind motherless by choice as a term. Sounds an awful lot like parricide to me.
Nicholas, you are correct. My mistake. I will ask if this can be edited. The corrected sentence should say, “The conscious choice to not have children is often referred to as childless by choice or sometimes childfree by choice.”
I’ll fix it now.
Thank you for this article. I assumed I was going to marry and we would have kids. My husband and I dated several years before we got married. At that point I was in residency and life was all about surviving. When my husband told me he really didn’t want to have kids, I was shocked at first, but eventually a sense of relief came over me. It was uncomfortable when people would ask us when we were going to have kids. But ultimately it was the right call for us. I really hadn’t thought about that as an option and I’m glad he had the courage to have the conversation with me. I was always about doing the expected thing growing up in a small town in the Midwest. I think our situation has shown others in our life that you don’t always have to conform to expectations.
It’s funny, people used to say, “But you’re nice, you’re normal, you make good money! You should have kids!” Now that we are in our 50’s and that ship has sailed we don’t hear that as often. It used to annoy me that those should be reasons to have kids. Now it just makes me laugh.
I hadn’t thought about using our Roth before the 401k. Very interesting to consider. We have wonderful nieces and nephews who will hopefully take care of us in our old age. Thanks for sharing your story!
Wow, quite an assumption to have never discussed before marriage. Glad it has worked out for you both. For those not yet married, I HIGHLY suggest you discuss all of the following prior to marriage:
Money
Religion
Politics
Kids
In-laws
Sex
These are the things that cause the fights in marriage and divorces. You need to be on the same page with most of these and reading the same book with all of them to have a lasting marriage.
Thank you for sharing your story and offering sound guidance / advice. This is why I like that this web site now has an array of columnists. All the columns adhere to sound financial principles, but the diversity of contributions makes it so people in similar situations and groups can apply those principles to themselves. I still read columns that aren’t applicable to me because I still tend to learn from the approach in a way that might still be relevant to my situation. Thank you.
Thanks for reading!
Great article! I would love to see a deep dive into estate planning for us DINKs, including how to recognize when you can’t manage your own money anymore. I also use the term “childfree”, hadn’t heard the term used in this article before.
Thanks Erik! Great idea for a future article; I’ll add it to my queue of ideas. =)
Seconded on the deep dive into estate planning for people without kids; would be very helpful!
There aren’t a lot of differences, just different or likely fewer heirs. Probably more need for a living will/health care power of attorney. And of course you child isn’t going to be the executor of your estate.
I am in my eighth decade of life. I’ve been “out” since I was a teen; it was a different era of course. I could not have made it without the support, love and friendships of others. I don’t want even for my family to think about having to help me and thus, I have saved until General Washington yells at me from the quarters to let him go. (Fortunately, my great niece has stopped telling people I knew him personally; as I said, I’m old, though not that old.) I also want to help others. Hence, part of my financial planning has included setting up an endowed scholarship through the local community foundation to help local teens. I have also taken care of planning and paying for escalating levels of care as I age since most folks in my family live into their ’90’s.
Many of my friends without children worry about who will take care of them, look out for them. There are resources out there, but it is frankly exhausting to find them and it presupposes a certain level of understanding of financial and legal management which if one waits too long, is too late.
Part of the planning is also how to handle my remains. I’m Jewish so much is already planned in accordance with tradition. Where I have some discretion I have asked to be buried in a shroud or the least expensive pine casket without looking cheap. I also want a Shomer; end of life planning is important to make it easy on the family.
Thank you for a great article. I second the vote for more articles pertaining to child free individuals or couples. Since we are in the minority, it’s always helpful to see others’ views and experiences.
(As a sidebar, $18,000 x 4 = $72,000 🙂 Thanks again!
You are correct. I’ll ask if this can be edited. Thank you!
Fixed.
Loved the article. As a fellow DINK couple it’s really nice to see this perspective and would love to see more in the future, especially regarding an adjusted FIRE timeline since we’re able to frontload a lot more saving during our peak earning years and (presumably) really take advantage of compound interest. Thanks!