​​Retirement Planning for Couples​​ Without Children

Key Takeaways for Couples Without Children Planning Retirement

• Consider a flexible withdrawal strategy.
• Align your portfolio with your goals.
• Make a long-term-care and estate plan.
• Plan ahead for aging in place.
• Consider working with a financial advisor.

Valentina Djeljosevic: Hi, I’m Valentina Djeljosevic with Morningstar. Welcome to Retirement Planning for Real Life. In today’s episode, we’ll talk about couples who don’t have children, and how they might plan for retirement differently. Christine Benz will tell us about the key issues to keep in mind, like long-term care, estate planning, and deciding who will help manage your affairs later in life. Christine is Morningstar’s director of personal finance and retirement planning. She’s also the co-host of The Long View podcast and author of How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement.

Nice to see you, Christine.

Christine Benz: Good to see you too, Valentina.

Growing Rate of Adults Without Children

Djeljosevic: Let’s start with demographics. The percentage of adults who don’t have children is growing, right?

Benz: Yes, that’s right. The fertility rate in the US hit an all-time low in 2024. Roughly one-third of adults in the US do not have children. About half of people who are under age 50 say they never intend to have children. Of course, there are a lot of factors playing into this. Some of this is very much by choice. People decide that they don’t wish to have children. In some cases, it may be that someone wanted to have children and was not able to do so, or maybe they just never met the right person to have children with. It’s important to approach the topic with sensitivity and acknowledge that not everyone who does not have children does not have them by choice, but some certainly do.

Djeljosevic: Yeah. I like that perspective. Some people have kids, some people don’t have kids.

Benz: Exactly.

Djeljosevic: For people who do have kids, it’s pretty indisputable that it’s very expensive.

Benz: Yes.

Djeljosevic: So, it seems like everything about retirement for people who don’t have kids should be a piece of cake, right? But is it?

Benz: Yes. A lot of it is so much easier. It starts with income coming into the household. Couples who do not have children do tend to have female partners who have higher educational attainment than couples with children, and so the female partner tends to bring that higher income into the household. That helps in large household income. When you have children, you often have to pay for childcare, and that’s something that you can take out of the equation, obviously, for people without children. Two incomes working longer are a very powerful tailwind for couples without children.

Of course, on the spending side of the ledger, kids are expensive, as you know, Valentina. There’s a group that typically tallies the cost of raising children from age zero to age 18, and the most recent figure was $233,000. That’s a big number. A big percentage of that is childcare, where costs are not getting any better for families. Of course, the cost of college keeps creeping up as well. That’s another thing that hangs over the retirement plans for many couples who have children. They want to simultaneously save for their own retirements, but they also have this motivation to save for their kids’ college. That’s something that is not present for people without kids. They’re not worrying about those things.

Retirement Spending and Portfolio Priorities

Djeljosevic: What are the key priorities in terms of planning for retirement spending, and how to invest their retirement portfolio?

Benz: This is interesting because it’s important for couples without kids to take a step back and think about what their motivations are for their retirements and for their money over their lifetimes. For many people without kids, and I don’t want to generalize, but for many people [without] kids, leaving a bequest isn’t a strong motivation. If they don’t have children, they may want to spend more over their own lifetimes. To me, that points very much toward a flexible or dynamic spending system during retirement, where you’re adjusting spending up and down based on how the portfolio has behaved, with an eye toward consuming more of that portfolio during your lifetime, even if that involves lifetime giving. That also affects the asset allocation of that portfolio in retirement.

If your plan is to consume that portfolio during your lifetime, you’d want it to be a little bit more conservatively positioned. It doesn’t need to be as growth-oriented as that portfolio for an adult who has that strong bequest motive. So, take a step back. Now, certainly, there are many people without kids who do want to leave a bequest where they want to leave money for their nieces and nephews or charity, but take a step back and think about what you’re trying to accomplish with those retirement funds.

Long-Term-Care Planning Without Adult Children

Djeljosevic: OK. Even though couples without children are financially in pretty good shape compared with parents, like we talked about, there are a few areas where they need to proceed with caution. What are those areas?

Benz: Right. Kids can be a really nice backstop as we age. They may not be everyone’s first choice. You may not wish your children to take on the responsibilities of overseeing your financial life or your long-term care, but they’re there for many people with children. For people without kids, they do not have those backstops. It’s important to take a step back and think about what you are doing in terms of aging and aging in place. Many older adults do wish to age in place in their homes, but for people without kids, it’s just more difficult. And I’ll say, as the person who was very involved in a hands-on way in helping oversee my parents’ care, it was a lot. For people without kids, they need to think about their aging plan. They need to think about their long-term-care plan without someone there to oversee the care needs that they might have, and who will serve those roles for them going forward.

Estate planning is also super important for people without children. If they are going to need powers of attorney, which we all need for our financial and healthcare matters, who will be your agents of power of attorney? Think about who those people might be, and think about who will be your executor. Think about aspects of your beneficiary designations and your will that you want to reflect your goals for your assets when you’re no longer here.

Should You Hire a Professional Fiduciary?

Djeljosevic: The executor doesn’t have to be a family member, right? It could be a professional.

Benz: It doesn’t. And I think there’s a very good case for more paid fiduciaries for people who are aging without children, that even though you may have been able to amass a robust amount of savings, you may have to spend a little bit more for these paid fiduciaries later in life. It may be a paid executor. You can also have a paid POA for your financial matters. Those can be very appropriate for people without kids, where there’s not an obvious person to help oversee your affairs.

Djeljosevic: For people who don’t know, a fiduciary is what?

Benz: A fiduciary is someone who is a professional entrusted with representing your interests rather than the interests of any other entity. That’s sort of the general umbrella term for a fiduciary.

Djeljosevic: It’s their job to look out for you.

Benz: Exactly.

Aging in Place Without Family Caregivers

Djeljosevic: OK, got it. Is there anything specific about aging and long-term care that people need to keep in mind?

Benz: Well, the point about aging in place is an important one. I would say for people without kids, really lean into it, that you don’t have this backup plan. Frankly, I think that it can lead to a lot of inertia in families. If people know that their kids will be there to clean out their house or help them transition to the next stage of life, sometimes it can help people defer the hard decisions. For people without kids, it is what it is, and you just have to lean into those decisions, get preemptive, think about what your plans are for later in life, and make it happen.

Djeljosevic: And do that death cleaning now.

Benz: Well, exactly.

Why Couples Without Kids Should Get Professional Financial Advice

Djeljosevic: OK. You said that couples without children have a strong incentive to get professional advice. Why is that, and why should they consider paying for help, beyond what we’ve already talked about?

Benz: Yeah, this is something that my husband and I have taken to heart. We have a financial planner we work with, and we do not have children. It was a key motivation for us to have that backstop for our financial affairs. Even though I’m pretty conversant with investing and personal finance stuff, the idea was we wanted to bring someone on board who would have all of our accounts at her fingertips, know where we’re situated in terms of insurance and our housing choices, and really be our partner as we move through this aging process. I really do think that’s a best practice for older adults without children to think about getting some financial planning help, and know that it doesn’t necessarily involve paying someone in perpetuity; that you can kind of pay for that advice on a per-engagement basis if you wish to, or on an hourly basis, which is how we pay.

I think that that’s a standard that adults should bear in mind if they do not have children. They need that financial buddy to be their partner to help oversee their financial affairs, maybe even to help with things like bill paying, as things like that become more difficult. It’s important to have that trusted financial partner, and that paid financial planner can serve that role very valuably.

Djeljosevic: I really like that, that idea that this person’s your partner.

Benz: Exactly.

Djeljosevic: They’re not just somebody you pay.

Benz: Exactly.

Djeljosevic: Yeah, that’s beautiful. Thank you so much, Christine, for being here.

Benz: Valentina, thank you.

Djeljosevic: For more from Christine Benz, be sure to sign up for her free weekly newsletter, Improving Your Finances. Thanks for watching.