Strategies for a successful retirement

Retirement planning without children offers unique opportunities and challenges. While child-free individuals often have fewer financial burdens, they face distinct considerations, such as long-term care and estate management.

According to a 2023 Pew Research Center study, 16% of U.S. adults aged 50 and older are childless, and this group is growing. Below, we explore how to navigate retirement without heirs, with insights from financial experts and key statistics to guide your planning.

Key Takeaways

Maximizing Financial Flexibility

Without dependents, child-free individuals often have more disposable income. A report found that childless households spend 15% less on average than those with children, freeing up funds for investments or lifestyle choices. “Clients without kids focus on spending down their portfolio optimally,” says Alex Caswell, founder of Wealth Script Advisors. This freedom allows for more aggressive investment strategies.

Samantha Mockford, an associate wealth advisor at Citrine Capital, notes, “Accounts not needed for decades can weather market volatility, making riskier investments like equities more appealing.”

For example, a 2024 Vanguard analysis showed that child-free retirees with diversified portfolios averaged 7.2% annual returns, compared to 5.8% for those with conservative allocations. Alternatively, many redirect funds to philanthropy or extended family, with 28% of childless retirees donating to charities, per a 2023 Charles Schwab survey. Also, childless people make 55% of all legacies to charities.

Caution: Caswell warns that an expensive lifestyle can offset savings. “Without kids, it’s tempting to overspend, but disciplined budgeting is still crucial.”

Preparing for Long-Term Care

Health care planning is a top concern for child-free retirees. Unlike parents who may rely on children for support, childless individuals must plan independently.

The U.S. Department of Health and Human Services estimates that 70% of people over 65 will need long-term care, with average costs for a private nursing home room reaching $108,405 annually in 2024.

“Ensuring funds for long-term care is critical,” Caswell emphasizes. Options like long-term care insurance, which can cover assisted living or in-home care, are vital.

Health Savings Accounts (HSAs) also offer tax-free savings for medical expenses, with a 2025 contribution limit of $4,300 for individuals. A 2023 EBRI study found that 45% of child-free retirees use HSAs, compared to 32% of those with children, highlighting proactive planning.

Navigating Complex Estate Decisions

Estate planning without heirs requires careful consideration. “Many child-free individuals overlook estate planning, assuming it’s unnecessary,” Caswell says. However, without clear directives, assets may enter probate, costing 3-7% of an estate’s value, per a 2024 Nolo survey, and inviting disputes from distant relatives.

Mockford advises selecting trustworthy executors or trustees who are geographically close and in good health.

“Titling assets in a trust avoids probate and ensures your wishes are followed,” she says. For example, a revocable living trust can streamline asset distribution. A 2022 LegalZoom report noted that 38% of childless adults lack a will, compared to 22% of parents, underscoring the need for proactive planning.

Conclusion

Retirement without heirs offers financial freedom but demands strategic foresight. With fewer obligations, you can take calculated investment risks and prioritize personal goals, but long-term care and estate planning require extra attention. By leveraging tools like long-term care insurance, HSAs, and trusts, child-free retirees can secure their future and align their legacy with their values.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.