An author and financial planner discusses investment and personal finance considerations for ‘childfree’ adults.
Our guest on the podcast today is Dr. Jay Zigmont. He’s the author of a new book called The Childfree Guide to Life and Money, and he’s also the founder and CEO of Childfree Wealth, a financial planning firm dedicated to helping people without kids. Dr. Jay is a certified financial planner, and he also has his MBA, as well as his PhD in Adult Learning from the University of Connecticut. He hosts the Childfree Wealth podcast, and he previously published another book called Portraits of Childfree Wealth. Dr. Jay, welcome to The Long View.
The Childfree Guide to Life and Money: Make Your Finances Simple So Your Life Without Kids Can Be Amazing, by Jay Zigmont
Portraits of Childfree Wealth: 26 stories about how being Childfree impacts your life, wealth and finances, by Jay Zigmont
“Census Bureau: Older Childless Women Make More Money, In Better Health Than Male Counterparts,” by Carlie Porterfield, forbes.com, Aug. 31, 2021.
“11% of Older Americans (55+) Are Childfree,” by Jay Zigmont, childfreewealth.com, Aug. 28, 2022.
“Among Unmarried Adults, Women Without Children Have as Much Wealth as Single Men,” by Richard Fry, pewresearch.org, Nov. 4, 2024.
“Choosing the FILE Lifestyle—Financial Independence, Live Early,” by Jay Zigmont, childfreewealth.com, Aug. 28, 2022.
“FILE vs FIRE—Finding What Is Right For You,” by Jay Zigmont, childfreewealth.com, Aug. 28, 2022.
Die With Zero: Getting All You Can From Your Money and Your Life, by Bill Perkins
“How Do I Embrace the Die With Zero Approach?” by Jay Zigmont, childfreewealth.com, April 30, 2024.
“Not Having Children ‘Breaks’ Traditional Financial Planning, says CFP—8 Money Rules for Childfree People,” by Ryan Ermey, cnbc.com, Dec. 5, 2023.
“How Much Does Assisted Living Cost in 2023?” by Sam DiSalvo, finance.yahoo.com, March 30, 2023.
“Long-Term Care for Childfree Individuals,” by Jay Zigmont, childfreewealth.com, Nov. 23, 2023.
“Who Will Take Care of Me?” by Jay Zigmont, childfreewealth.com, Dec. 12, 2023.
“Get Your Paperwork Right, Now!—Wills, Beneficiaries, Living Wills, POAs and More,” by Jay Zigmont, childfreewealth.com, Aug. 28, 2022.
“New Report: Being Childfree May Not Make You Rich, But It May Make You Happy,” by Jay Zigmont, childfreewealth.com, Oct. 6, 2022.
“The Gardener and the Rose,” by Jay Zigmont, childfreewealth.com, Aug. 28, 2022.
The Purpose Code: How to Unlock Meaning, Maximize Happiness, and Leave a Lasting Legacy, by Jordan Grumet
“Jordan Grumet: The Purpose Code,” The Long View podcast, Morningstar.com, Jan. 7, 2025.
Christine Benz: Hi, and welcome to The Long View. I’m Christine Benz, director of personal finance and retirement planning for Morningstar.
Amy Arnott: And I’m Amy Arnott, Portfolio Strategist for Morningstar.
Benz: Our guest on the podcast today is Dr. Jay Zigmont. He’s the author of a new book called The Childfree Guide to Life and Money, and he’s also the founder and CEO of Childfree Wealth, a financial planning firm dedicated to helping people without kids. Dr. Jay is a certified financial planner, and he also has his MBA, as well as his PhD in Adult Learning from the University of Connecticut. He hosts the Childfree Wealth podcast, and he previously published another book called Portraits of Childfree Wealth. Dr. Jay, welcome to The Long View.
Dr. Jay Zigmont: Thanks for having me.
Benz: Well, thanks for being on. So your new book is called The Childfree Guide to Life and Money. What prompted you to write a book that was geared toward people without kids and focus on them for your practice as well?
Zigmont: Yeah, so my wife and I are childfree, and when I was studying to become a CFP, what was surprising to me is there was never once mentioned in any of the literature of the concept of living a life without kids. And I started kind of looking at this, and I’m a researcher by nature, and I started researching this question of like, are my wife and I weird? Or just like, how weird are we? We’re pretty weird. We’re two PhDs. We’ll sit around at dinner talking about research studies. Like, we’re weird, but how weird are we for being childfree, living life we want to live, where do we want to go? And I didn’t even know the term childfree existed at the time. And come to find out, I found a subreddit of like 1.5 million people that are childfree. So like, there’s a bunch of us out there. And as I started looking into the topic more and more—I’ve now spent years researching this—come to find out 25% of the US are childfree or permanently childless. So it’s a huge population, yet it’s still a group that financial planning overlooks. If you look at the standard life plan—or we call it the standard life script—you look at the stages of life that are built into the planning, they all assume you either have kids or you will have kids. And my worry, and I think I’ve found this multiple times, is that that results in bad advice.
Arnott: So what about the financial wherewithal of people who don’t have children? Are they better off on average than people with kids because they don’t have all the costs associated with raising kids and college tuition, things like that?
Zigmont: So I think there’s like this assumption that like, if you are childfree, like a check falls from the sky and makes you rich. And that’s just not true. There are people who are struggling who have kids and people are struggling who don’t have kids. So income disparities still exist. If you look at the data, the US census found that if you look at individuals, the group with the highest net worth on average were single childless women. But it was only by a couple thousand dollars over the next group, which is fathers. So it’s not enough to make a difference. What is interesting is the gender wage gap nearly disappears in childfree couples. So Pew Research put out a study earlier this year, and they looked at median monthly income and they found that the wage gap between men and women is about $1,800 in parents. In childfree people, it’s about $160 a month, which statistically is essentially gone. And that’s something you do see. I think part of the reason why you don’t see a huge net worth difference is it’s not a priority for childfree people. They probably could make more money if they wanted to—they don’t have to pay for diapers and all that fun stuff. But it’s not a goal.
Benz: So I want to follow up on that lack of wage disparity because it does suggest that the caregiving obligations, which often fall to women in many households that have children, it suggests that that does explain this gender, or at least a big share, of the gender wage gap that we see. Is that taking things too far, do you think?
Zigmont: I think you’re on the right path. I had somebody else call it the motherhood penalty.
Benz: Yeah.
Zigmont: And that’s pretty spot on. And I think what’s interesting is if you look at the bigger picture, the bigger economics, as women’s education has gone up, as reproductive rights have been widely accepted in different areas, you see women making different choices. And it used to be the old school—and I kind of don’t like this term—but it used to be like, oh, you would choose to be a career woman instead of being a mom. It’s not a choice. For some people it is, some people it isn’t. But you can see different paths. And you do see that maybe it is because of the expectations, the caregiving, all the other things, the career stop, all of that. But it’s something that’s not really talked about much.
Arnott: I think one great thing about the book is I think a lot of the information is relevant to people in general, people who have kids as well as people who don’t have kids. I do have kids, although they’re in their 20s, so I’m an empty nester right now. But you mentioned that people without kids are different enough from people with kids that they have some specific financial planning needs. What are the main areas that you would highlight there?
Zigmont: So if you look at the core assumptions, I tend to start at the end of life and work backwards. As a whole, most childfree folks don’t have a priority on how much money they give to the next generation. The way my wife and I say it is our nephews get what’s left over. If they get $10,000 or $100,000, that’s fine. But if they get $1 million, we made a mistake. And it’s kind of something akin to a die-with-zero approach. And if you’re not trying to pass on money to the next generation, it changes assumptions in your financial plan. And then when we add on that a vast majority of childfree folks aren’t looking at the standard retirement structure, where they’re looking at more of what we call FILE—financial independence, live early—kind of a dial-back-on-work rather than a complete cutout. If you’re not going to retire and you’re not going to pass on money to the next generation, a lot of assumptions change in your financial plan. Even things like life insurance have a very small purpose for childfree folks.
Nearly zero usage for people that are what we call soloists, single with no kids. Things like long-term care we know we have to plan for, although the truth is everybody should do that. It starts changing all these assumptions. And the end result is for a childfree person, you actually have to do life planning first rather than just financial planning. Because there’s so many options that if you don’t create a life plan first, you may get to a goal that is not yours. The bonus of being a parent is there’s kind of like a culturally accepted standard life script. You go to school, you get married, you have kids, you work 25 years, pass the money to the next generation, all this stuff. When you’re living a life of childfree wealth, the way we look at it is you have time, money, and freedom to do what you enjoy, but it’s almost too much. It’s like, what do we do if we can live anywhere? What do we do with our jobs? What do we do with our life? And it’s one of those things where if you follow the standard financial advice, you might get to your goal, but it might not be your goal. It might just be the one that’s set for you.
Benz: I want to follow up on the idea that people without kids maybe aren’t as attuned to passing money to the next generation. That seems like a pretty big generalization. I’m sure you have clients who don’t have kids who still have that as a priority or maybe you don’t. I’d be curious to get your take on that.
Zigmont: So, interesting side note, if you want to look at a group that understands childfree people and understands how to market to them, it’s a lot of the charitable organizations, philanthropic organizations, because they’ve found that childfree people, on average, donate more. And you’ll see that a lot in people’s estate plan. But the challenge is if you’re going to give money, you’re better off giving that throughout your life rather than at the end of life. Yes, my wife and I, we care about our nephews, we want to help them, but we’re better off helping them now. Because if we help, if we give money when we die, we’re going to be 90 something— hopefully—they’re 60 something, they’re not going to need the money now. So what it is, it’s a shift in perspective where I’ll ask clients, do you have a priority in how much you leave to the next generation? They will say no. I had somebody last night say, “I’ll give it to my animal charity,” or whatever else it is. Great. Or “I’ll give it to my niece and nephews,” whatever it is. But it’s not a goal to leave a certain amount or a large amount.
Arnott: So I think you mentioned Bill Perkins’ book earlier, Die With Zero. Can you talk about what the book’s title means to you and why you think that’s good advice for people without kids?
Zigmont: Yeah, I’ve actually started avoiding the title because some people think Die With Zero literally means like you’re going to bounce your last check. And we’re not going to do that. We have a safety net for it. Like, hey, I would love to know exactly the day I’m dying that I can do the math backwards, but it’s not going to happen. But when Bill wrote the book, what’s interesting in there, he has a whole big chapters on kids and all of that. But for childfree folks, it outlines a structure of how do I use my money to maximize my health, my wealth, my time across my life, which really is an approach that our childfree clients follow. The challenge is it changes a lot of core assumptions in financial planning. When you look at financial planning, Monte Carlo assumptions are all based on the likelihood that you run out of money. If you’ve got 100% Monte Carlo success, that’s technically 100% failure at dying with zero. You’re not going to run out of money.
Well, it sounds good to not run out of money, but I went through a client’s file last night. We did all their Monte Carlo and we’re like, OK, this simulation—it’s always a simulation, so you never know for sure—says you’re going to die with $100 million. So you have a $100 million problem. And they kind of laughed at me, but I’m like, no, if your goal is not to leave a whole lot of money to your estate or wherever else it is, you are saving money and investing it in a way it doesn’t match your goals. And it’s that shift in mindset. That’s what that Die With Zero book does. It kind of gets people to look at how can I give, live, and enjoy my money throughout my life rather than just passing it after I’m gone.
Benz: You’ve talked about how your nephews will receive any amounts that are left over when you and your wife are gone. And you wrote in the book that if it’s $1 million or more, you’ve failed somewhere along the line. Can you expound on that and talk about what you mean by that?
Zigmont: Absolutely. So I think when you’re looking at if you want to help people in life, whatever that is, for my nephews, they’re going to be better off if we help them earlier in life than when we’re dead. If we’re giving them money and we’re 90 and they’re getting it when they’re 60, there’s less of a use of it. If you think about your life, you could have used a little hand up earlier in life, whether that was in your 20s or whatever it is, whether it was college or whatever it may be. You’re better off helping them then. That’s why we have 529 plans for our nephews. That’s why we have ways we want to give money to them. And it’s been interesting talking to clients about it because they all have different approaches. And one of my favorites, my client had an account. It was called “get the babies to love me” fund, which I just love that name. But really what they were doing was saying, how do we make an impact on our nephews and nieces? And they’re like, hey, this fund is specifically not for college, but it’s for like their first car. And if they want to start a business or, they want to backpack across Europe, there are ways you can make an impact earlier in your life that will set them up rather than just keeping it in your account, and oh, you’ll get it later.
Arnott: Yeah, we’ve heard people talk about this concept of giving with a warm hand instead of a cold one. And I think you’re right that often a monetary gift at the right time when someone is younger can have a bigger impact than it might if they don’t receive money until they’re in their 50s or 60s.
Zigmont: Absolutely. And besides the fact, you get to be part of it then. So I’ve got folks that are giving to their family and helping them figure out finances early on. They’re actually like paying for people to get with a financial planner and get a good foundation set so they can have money later. That has a huge impact. And you know what? It’s a fun thing to do. Like it’s fun to give money away to charities, to people, to people that matter to you and see the impact.
Benz: So in addition to that, do you think that there’s potentially a self-interested reason to give to your loved ones during your lifetime? Like if you are part or if you’re a person without children and you’re giving to say your nieces and nephews, does that potentially make them a little more likely to help you later in life? Or do you advise against that sort of transactional approach to helping young loved ones?
Zigmont: So one of the hardest decisions for childfree folks is who’s going to make decisions for you at the end of life? Like, who’s going to take care of you when you’re older? And the problem is if you think, hey, if I give some money to my nephew, they’ll take care of me. The data does not back that up. So I had somebody reach out to me and she sent this email that said, “I’m 71.” She was in Washington. She’s single. She’s like, “I got nobody that can rely on to make decisions for me to help me out.” She’s like, “I got one nephew. He’s across the country. Maybe if I give him my estate, maybe he’ll take care of me, but I don’t really know him.” And my response to her was that is setting up an opportunity for elder abuse. Because if your nephew is going to get your money when you’re left over, if they’re making the choice, which home to put you in, unfortunately, they may choose to put you in the cheaper home and get the rest of the money. I hate to be that jaded, but if you look at the stats on elder abuse, it’s rampant across the country. And saying, hey, maybe if I give them more money, they’ll take care of me. Unfortunately, the data just doesn’t back that up.
Benz: Well, even if it’s not literally like “take care of me,” it’s more sort of “I want to keep them in my life and make sure that they’re interested in how I’m doing”—those kinds of things. Like, even if you’re not expecting them to be on the ground, being caregivers or anything like that.
Zigmont: Yeah, I think that’s possible. But I think the flip side of that is, do you become an ATM? Like, did they come to you just for the money, and they’re friendly with you just for the money? My wife and I have adopted that we don’t give anybody money as far as helping them out, but we will buy them services if they need it. I’ll buy the groceries that I have to, or whatever else it is, because I don’t want to build a habit where, oh, I get to know them because, they’re here begging for money. So you have to find that balancing act. I think if it is transactional that way, I’m not sure the balance is there.
Arnott: So I’m curious about the investment side of things. Do you think the asset allocation of a portfolio for someone who is following the Die With Zero approach should look different than it would for someone who wants to leave a legacy?
Zigmont: Well, it’s interesting. So when we look at a Die With Zero plan or winding down your wealth, as we call it, we set a safety net. So the safety net is you have a plan for long-term care. You put off Social Security till 70 and you have a little cash cushion. The cash cushion is usually like one or two years of expenses. And then we optimize for how much money can you spend each year. And it’s actually a minimum amount of spend rather than a maximum. And you can do two different things with your investments. If you’ve truly got a Die With Zero plan, you could go 100% into fixed income and be OK, because it’s a predictable amount. You could just run a ladder and do it. On the flip side, you could also go nearly 100% into stock and just take a chance. You swing for the fences because the goal, you’ve got that safety net there. The goal isn’t to pass on a certain amount of money. You can go either way. And both of those seem weird. We’re talking to somebody in their 60s and 70s like, hey, you could be 100% stock, or you could be 100% fixed income, whichever works for their structure. And when you walk them through like, well, but the general rule says I need to have and blah, blah, blah.
And that’s where those general rules don’t fit. And it’s more a question of what type of life do you want to live and how do we make sure you’re spending enough to bring down your net worth, which is a challenge. I mean, we spend more time with our clients talking about spending money than saving money. And sometimes it actually helps them to spend more money if they’re on a fixed-income investment. They just run it. Others, hey, they will have big dreams, and they want to take a chance. Both work.
Benz: I wanted to follow up on that spending point because it seems like that’s a recurrent theme with a lot of financial advisors we talk to where they say that getting their clients to switch on the spending after a lifetime of saving is a really tricky, tricky thing. I’m wondering if you can share any techniques that you have. And it seems like they would probably be relevant to people with kids, without kids to get them to spend an appropriate amount given whatever their goals are.
Zigmont: So my PhD is in adult learning, and I come out of that kind of the behavioral side. And I probably spend more time with my clients, working on that behavioral side, the money mindsets, than I do on the finances. Because our goal, the way we look at it is we’re always trying to make your finances simple so your life can be amazing. So we’re not doing anything fancy on the investments, but we’re trying to get them to actually enjoy their money. And I think the hard part is the people that have been great savers, like we have to unprogram 40 or 50 years, or whatever it is, of experience. We run into it so often we call it the blueberry problem, which is the people that have the money they need to do whatever they want. But they’re buying the frozen blueberries because they’re a dollar cheaper than the fresh blueberries. I’m like, just buy the good blueberries. You’re fine. I have a client with tens of millions of dollars still cutting coupons. I’m like, you don’t have to do that anymore. But the hard part is that’s not where their brain is.
So great example of this. What we’ll do is we will combine whatever their priorities are, their goals are for spending with a giving option. So for example, when you spend money often there’s guilt around it. So I have a client, we set up a goal and said, all right, I want you to spend X amount of money per year. In their case, like $100,000 on travel. But we’re also going to give away $100,000 each year. And what ends up happening is because they’re giving—and it’s not always to charity, some of it’s to family or whatever else it is—they’re giving, they feel OK about. And that makes it OK also for them to spend on themselves. Now, I will tell you at the end of the year, I do ask them, which did you get more out of, the travel or the giving? And it’s usually actually the giving they got more out of. But it changes the habits. I had a client the other day, like “You’d be proud of us. Last year we spent double what we did the year before!” And I’m like, yes, and we’re celebrating it.
Arnott: You also have a section in the book on the 4% guideline for retirement spending that is this well-known rule of thumb that so many people have latched onto. But you argue that that really doesn’t hold up for people without kids. Can you talk a little bit more about that?
Zigmont: So the 4% rule was based around the concept of once again, I don’t want to run out of money. And you go into the data, and I don’t know, depending on the week, you’ve got the different numbers was 3.7% or four or five or whatever else they are. They are all very rough back-of-the-napkin math that do not reflect the lifestyle you want to live. And they have assumptions in there that don’t match. So that’s really all based on essentially Monte Carlo simulations. If I do a Monte Carlo simulation for my clients, I’m trying to get to like 50% success. Half the time they run our money, half the time they don’t. And it gives you a better idea of what they can actually spend. The 4% rule is great for like just directional: Hey, I need about this amount of money. But what we find with our clients, because they’re not retiring in the classic sense, they’re going to work a little bit. They’re going to do some things.
They actually save too much by the 4% rule. And if they’ve been kind of deep in the FIRE literature, deep in kind of like, “I’ve got to hit this number,” what ends up happening is they focus so much on the number, they miss their life on the way by. And it’s one of those things you have to reprogram. And if you’re going to die with zero, if you’re going to go down that path, you really need to be doing ongoing financial planning, not one-off, let me grab a number and play with it. And I think that’s a different mindset than just saying, here’s a general back-of-the-napkin math and it should make me through.
Benz: To follow up on that. So you mentioned that 50% probability is a starting point. And then is the idea when you work with clients, you’re revisiting that on an ongoing basis based on what their spending has been like, how their portfolio has behaved and so forth. And you kind of recheck that probability of success?
Zigmont: Yeah, we’re more on the retirement guardrails-type approach, but it’s really around, we have to bend that net-worth curve. So there’s just those assumptions that have to change to the point where we can look at it and say, over the last two years, this has been your spending, this has been your growth, your net worth is still going up. We need to optimize for spending more. And since you’re doing it regularly—we have an ongoing financial planning process, that’s how we do this—what happens is you can make tweaks each year based on their goals, based on the market, and based on where they’re trying to go. I think the challenge is if you try to guess it up front, you’re just wrong. I mean, we all know that any prediction, we know is wrong. But if we’re doing an ongoing financial planning and life planning process, these adjustments each year, you can get to the impact you want to make and get to enjoy your money.
Arnott: Another interesting thing that you wrote about in the book is you mentioned you’re not counting on Social Security in your own financial plan. Instead, I think you are building in a benefit of 80% of what you would be eligible for. Do you think it’s inevitable that Social Security benefits will have to eventually decline or start at a later age?
Zigmont: Yeah. So I’m a Gen Xer and for Gen Xers and younger, I don’t know that you can reliably count on having your full amount coming to you. We do use the number 70%, kind of cut back a little bit or consider it more of a bonus. And I think the challenge is there’s systemic problems with Social Security. So I was on a podcast, and somebody said it this way, “Well, you childfree people are not having kids, so we’re not going to have the constant growth, and Social Security is going to fall apart.” And I’m like, oh, hold up, Social Security was messed up before we got there. But if you look at the population growth and fertility rates, they’re dropping. There was just an article came out this week in Alabama where they’re not even keeping up with their population loss from death. Their population is shrinking because of fertility rates and people choosing not to have kids. And I think what you find is if you look across the world, the number of people choosing not to have kids has gone up. And if you look at countries like Japan, Japan’s about one third of folks are not married, they’re not having kids. They’re childfree. Well, if a third of folks are going to be childfree, your population will shift and systems that are based on constant growth like Social Security are going to need a complete revamp. And that’s the problem. Like, I’m looking at it and saying, OK, I’m not going to get Social Security for another, whatever, 25 years. There’s a huge demographic shift in those decades.
Benz: Going back to die with zero, you note in the book that the investment advice industry tends to be biased against that general idea of depleting or mostly depleting the portfolio before death. Can you talk about that and why you like different business models for financial advice for people who are aiming to go down this path that you suggest?
Zigmont: So I was talking to a major broker, and they were talking through this childfree concept, trying to understand. And they told me it this way. They said, “Look, this die with zero thing, this approach with childfree people.” They said, “I don’t think I can do that and still be a fiduciary.” And I was kind of surprised by that. I said, wait a minute, if this is your client’s goals, why can’t you do it? And we started peeling it apart. The issue was their entire system is based on this constant growth model. So if you take the 1% AUM world, the advisor is trying to make your numbers go up and you only see ads, like when you do better, we do better. And what that’s implying is your net worth goes up, we make more money, we’re on the same page. The problem is that can be a conflict of interest for childfree folks. Because if they truly want to die with zero, are you getting conflict-free advice that says, yep, I’m good with this, spend your money, enjoy it, invest in your life differently—if the advisor’s compensation is connected to it. It’s why we as a firm chose to do a flat rate.
We charge the same amount, no matter what you got for investments. We are particularly looking at it and saying, all right, we want to be able to serve the people that we do, which are childfree folks. So how do we make sure our model fits them? And as you start pulling it apart, you start seeing things like life insurance. Childfree folks are being pushed life insurance—it’s not a priority for them—but they’re being pushed because of compensation models. These are the biases that are in the system, or the conflicts, that become big. And it gets so big that we encourage childfree people, whether you work with us or not, that’s up to you. But always to ask your advisor, how is your financial plan different because you’re childfree? And what we found is when people do this, the first answer they’ll get, which I don’t agree with is, well, you’ll change your mind.
Like, let’s be real, we’re talking about, I got childfree people that got sterilized at 20, they’re not changing their mind. That’s just a dismissive comment. Or what they’ll get is, “Oh, it’s not different.” That’s not true. I’m actually OK if the advisor says, “I don’t know how it’s different, let’s figure it out.” But there’s all of these assumptions. And the problem is it’s even built into the software. So for example, the financial planning software we have, we worked with them for a while. Now it allows people to be in a couple that aren’t married. Because one third of childfree folks will never marry. But yet all the financial planning software you put a couple in there, it automatically assumes they’re married. It’s these biases that are systemic that we don’t see that we have to watch out for.
Arnott: So what about annuities? Do you think annuities make more sense for someone who doesn’t have children or who isn’t concerned about leaving a legacy?
Zigmont: Yeah, so I found one annuity that I’m OK with. And now, mind you, I’m a little skeptical of annuities to start. But what I’ve found is there is an annuity product, the fixed index annuity, that has a long-term-care rider. They call the health multiplier. But actually what it does is the last five years of your life, it doubles the amount you get out for those five years. It’s a way to take care of long-term care. And the bonus is you have a predictable amount of income each year for life. What I found is that works for the people that are the Nervous Nellies, they’re a little worried about the market, what if this plan doesn’t work, all of that. If I put them on that annuity side, they know they get a new check every month or every quarter or whatever it is, it actually frees them up to do a little more spending. Now, is it the best financial decision from a math equation? Maybe not, but it does free them up. It also works well for the folks that are, we call them soloists, the single folks. You have a guaranteed income through life, you don’t have to worry about longevity risk, you have a long-term-care solution, that works. The challenge is always with annuities, understanding the fees, the structures, what’s going into it, and that’s where it becomes a challenge.
Benz: You referenced long-term care, so I want to stick with that. You’ve got a really great section in the book about creating a long-term-care plan. And with your clients, you think it’s important to have that long-term-care plan in place by their mid-40s. I’m curious when clients are that young, is it difficult to get them to care about long-term care, or how do you have that conversation?
Zigmont: So I’m kind of laughing a little bit because, turns out, you can’t get a long-term-care quote until you’re about 30. I actually had a client at 29, I had to wait a year to get her a quote. I’ve got clients worried about it much, much younger. And part of that is, because we get this question all the time, well, who’s going take care of you when you’re older? And I have a love-hate thing with this question. What I love is it gives me an opportunity to talk about the concept, but what I hate is there’s a lot of assumptions in there. The assumptions that if you have kids, they’ll take care of you. And we don’t have those assumptions as childfree folks. And the data is very clear. If you look at the US Census, it looked at adults over 55 who are childless, they found that 2.5% of them got any financial support from their family. So that’s nearly nothing. The interesting thing is, in the same group, adults over 55 in the US, they looked at parents, and they found that 1.5% got any financial support from their family. So the assumption that your kids are going to take care of you for long-term care, mm, it turns out the data says no.
The difference for childfree people is we know we have to do it. And the mid-40s range is in there for two reasons. One, it gives people like, you don’t have to worry about it right this second yet. But also a good time to buy long-term-care insurance if you’re going to do it. And mid-40s was a math equation of how long do I pay for a premium, and what are the costs based on age and health? See, the thing about long-term-care insurance—and we recommend standalone long-term care insurance—is your health and your parents’ health impacts your cost. If your parents have cognitive decline, dementia, Alzheimer’s, if they both have it, you probably can’t even get a policy. If one of them has it, you’re going to get less coverage, or it’s going to double in price. So it’s not only your age that matters, it’s your parents. And what happens is when I show people what it really costs for long-term care, which the number right now is like $115,000 a year for a skilled nursing facility, men will spend 2.2 years, women 3.7, it’s a huge number.
The answer is you have to have a solution. Medicare doesn’t pay for it. That’s always the thing I got to remind people, Medicare doesn’t pay for it. Medicaid only covers you once you’ve run out of money. You need to have a solution. If you wait until your 60s or 70s to figure out a solution, you may have even spent through any money you would have self-insured, or the cost for that insurance has now gone up so much that it’s cost prohibitive. And that’s why we’re trying to get people to make decisions a lot earlier. I will tell you, it is a challenge to get people to put up a couple hundred thousand dollars for an insurance policy for long-term care, but the amount of fear that is there around who’s going to take care of me when we’re older, gets over it pretty quickly.
Arnott: You also have a discussion in the book about asset levels that point toward whether it makes sense to buy long-term-care insurance versus self-funding or relying on government resources. Can you talk a little bit more about where those kind of asset or wealth breakpoints might be for the different approaches to long-term care?
Zigmont: And you’ll find these numbers all over the place a little bit, and I’ve been playing with it a lot. And what I tend to say for my clients is if you have less than $500,000 of assets or more than $3 million, don’t look at long-term-care insurance, but it’s for different reasons. If you have less than $500,000 in net worth, chances are you’re not going to be able to afford long-term-care insurance, and you’re going to end up on a Medicaid path. If on the other hand, you have more than $3 million, you may be able to insure out of pocket. The challenge is in that middle range, if you don’t have a plan for long-term care, the money set aside or insurance, you may be either holding yourself back from spending money or spending too much where you’ve lost that safety net around long-term care.
Now those numbers are really, really rough because it depends on you, your health, your family’s health. It’s a big issue, because if you’re going to self-insure today, if you’re a couple self-insuring today, I’ll usually say put about a $500,000 aside, invest it appropriately, and that’s your long-term-care fund. The challenge is if you’re single, particularly single women, you still put aside about $500,000, because in a couple, usually one person will take care of the other person for a while, keeps them out of long-term care for a little bit, but if you’re single, you don’t have that backup. So we’re talking about in either case, putting aside $500,000. So people that can afford to put $500,000 aside for just in case, really have to have a high net worth. Some people will say $2 million, some people will say $3 million, but it takes millions.
Benz: I’m curious for clients who are thinking through long-term care, do you talk about the type of care that they might receive, and do you discourage them against aging in place, like staying in their house and getting care coming in that way, or do you not really get into that aspect of it?
Zigmont: All of the standalone long-term-care policies that we use cover in-home, assisted living, or skilled nursing, so the entire list. I think the aging at home is OK, but the real issue is aging in the right place, not aging in place being, whichever house you’re in. If you’re in a house and you got two flights of stairs to walk up, it’s not aging compatible. What we’re talking to clients about is picking the path they want to go on. So for example, we’re big fans of CCRCs, continuing care retirement communities, where you have a 55 and older apartment complex, and you have an assisted living and a skilled nursing, all as part of it. You can actually buy it all as a package. You can work through it and have a predictable amount that you owe. That works, but it depends on what you want your life to look like. I’m also a big fan right now of, there’s some elderly apartment complexes. And these are like high-end, really nice luxury places. They have concierge, they have dining, like the chefs like a Michelin Star chef—I mean, really nice places. And what they found is if they go into one of those apartments and that apartment includes housekeeping and food and transportation, the amount of need to leave for care is very low. Their number’s 5%, we’ll have to see how that data comes out. But can we build a structure where you can age in the right place and make that work? The bonus is those standalone long-term-care policies will cover the healthcare at any of those levels.
Benz: The reason I asked about aging in place, Dr. Jay, is that it seems like there is a lot of oversight required to help older adults age in place in their homes that in addition to the caregivers, there’s just a lot of household management that needs to go on, that if there isn’t that trusted adult child nearby, it seems like it could be very difficult to pull off, right?
Zigmont: Yeah, and we’re big fans of aging care managers to help with that. So you can hire people, they’re usually social workers or nurses, some of those things, where they are skilled in this and they know how to bring in the right team of experts to help you, how to make sure you’re getting the best, most out of your benefits, what care you do need. There are resources that can help you age well. I think the other thing we’ve seen, some folks are trying to approach like the Golden Girls setup—we’ll all live together, we’ll support each other. That works great, except for the last person or the one left because they don’t have any care. There are ways to work around it, but the difference is we need to have a definite plan for it.
Arnott: We also wanted to talk about some of the nonfinancial aspects related to the book. What did the data say about the overall happiness and life satisfaction for people who don’t have children?
Zigmont: We did a study on this. We were looking at why people choose to be childfree—we were looking at their finances, and we asked them, are you happy? Just like an open question, let’s have this discussion—94% said they were happy. Now, if you look at that number, and you say in the general US, what percentage of people are happy with their life? It’s less than half at most times. So we’re talking about a huge shift. And for the people that did not say they were happy, it was interesting because they even put notes like, hey, it’s not that I’m unhappy because I’m childfree, I have medical issues, I have other issues that are coming across. But we’re seeing that being childfree does not necessarily make you rich, but it may make you happy. And that’s a shift.
Benz: In the book, you discuss what you call the “childfree midlife crisis.” I’m curious, can you talk about what that is and what steps you would urge people to take to get themselves through it?
Zigmont: So childfree people—I see this a lot even earlier, like mid-30s, mid-40—they hit this point where they hit their personal, professional, financial goals, and then they’re like, now what? I hit it myself around that age. And when you hit it, you’re like, what’s the point? What are you going to do with your life? Am I just going to keep working? Am I going to keep just doing what I’ve always done? Am I going to keep moving up the ladder? There’s a lot of questions. And the problem is, we’re really diving into issues that are like self-actualization. Like, what’s the point? Why am I doing this? And what you find is when people dive into that, they get to a point where like, why am I continuing my career the way it is, for example? You’re like, “Oh, I’ve moved up the ladder, I’ve gone there, I’ve got some opportunities, but I hate my job.” I’m like, “OK, cool, let’s quit it.” And what we’ll do with our clients is we will shift them and ask the question of, “Well, what is the impact you want to make with the next 40 years of your life?” Or whatever it may be. And it’s interesting, because when you ask childfree people about impact, we know we’re not going to leave a genetic legacy. That’s just a different thing. So what is our legacy? And I’ll ask clients, “What’s the second line of your obituary say?”
So the first line is like, “Jay died at this age, at this location.” Normally they’ll say like, “Father of three, leaves behind Jack, Joe, and John.” That’s not going to be our line. And when I ask clients, “Hey, what do you want that line to be?” It takes some reflection; we have to work on it. But they come with amazing answers. So I had somebody say to me, “I want to have that best garden in the neighborhood.” She says, “Because I’ve had these gardens and everybody stops, takes a look, smells the flowers, sees the butterflies, and I can see the impact on the community.” Great. Well, let’s shift your money, your time and effort toward that impact. I’ve had others, “Hey, I want to have an impact on my family. I want to have an impact on my cherries,” whatever it may be. It’s not always about money, but if you do that, you can get past this childfree midlife crisis. Because it’s a question of what is your purpose? There’s a great book that just came out recently, Jordan Grumet’s book on The Purpose Code. It’s a great tool to dive into it. Those are the tough questions that we as childfree people are answering much earlier that often parents don’t answer until the empty nest phase.
Arnott: So another thing that can often happen in midlife is people without kids are often called upon to care for their elderly parents. And you write about the importance of setting some boundaries to make sure that you don’t get too sucked into all of these obligations. Can you share some examples of boundary settings? And it sounds like you’ve had your own personal experiences with this, dealing with issues that have come up with your mother.
Zigmont: I think the hard part is for childfree people, we get this, we call it the financial bingo, which is you don’t have kids so you can take care of mom, or fill in the blank of whoever the family member is. And it’s particularly an issue for people that are single and no kids. Because for the people that are single with no kids, it’s like, oh, you don’t have kids, you can move in with mom or she can move in with you. Now I’m picking on mom, it could be dad, it could be whatever. But the challenge is that is not necessarily what you want with your life. So we have a program we call the “eight no baby steps.” You may have heard of the “seven baby steps,” that’s the Ramsey program, we have our own “no baby steps.” And step seven is what is your plan for mom and dad or your parents or whatever else it is? Because what we found is your parents’ planning, or lack thereof, has more of an impact on your financial plan than your own choices. So I’ve been in the caregiver role in multiple different ways.
My mom’s been disabled most of my life since I was about 16. And when you’re doing that, it takes a toll, whether it’s on you personally or financially, do you have to change your job, whatever else it is. And the challenge is if you don’t set boundaries up front, there can just be expectations. So for example, my wife and I have set a boundary that nobody lives with us. Just, I know that’s not going to be good for us. I know it’s not going to be good for our relationship. We don’t do that, but we can support in other ways. Some people are OK with them living you. Well, I think the challenge is if you don’t set a boundary, mom falls, breaks her hip, now she moves in for recovery. Well, six months later, she’s doing better. And you’re like, mom, are you ever leaving? Which sounds a little harsh, but like, I got a life here too.
And there becomes a balancing act. And some people are saying, well, I’m going to pay for my parents’ long-term care. I had a couple, and between the two of them they had three living parents. They said, we would like to pay for our parents’ long-term care. I said, OK we did the math. I said, ”“It’s going to be about $750,000.” And they were like, “Whoa, whoa, whoa, we didn’t mean we’re giving three quarters of a million dollars.” I’m like, “Well, that’s the number.” And in their case, what we ended up doing is, they’re putting aside a certain amount of money each year toward a parent fund. And when that money is used up, that’s the end of it. And it allows them to know they did make the commitment, they did help out, they did make a difference, but there is a limit. And I think what happens is the earlier you have this conversation, you can talk to your parents, say, what is their plan? What is their structure? What can you do? What will you do? You can have a good relationship. If on the other hand, it’s just expected that mom’s going to live with you for the next 20 years, that can ruin a lot of things.
Benz: One concept you reference in the book for couples who don’t have kids is what you call the Gardener-Rose concept. I’m wondering if you can talk a little bit about that. And it sounds like you have used this concept in your own life, and maybe you can share some of that as well.
Zigmont: So we have couples—and I don’t really love the term—but it’s called DINKs, Dual Income, No Kids. And you have different options when you’re a couple. And my wife and I have embraced this Gardener-Rose, and you may have seen it elsewhere, it’s called the Gardener and the Flower. I call the Gardener and the Rose because my wife is not just any flower, she’s a rose. So that’s kind of why we’ve adopted it. And the intent is you take turns between who’s providing support and who is growing. So for us personally, we both have spent a bit of time in academia, in academics world, you get the tenure-track position somebody gets, and the other position is for the “trailing spouse,” which to me is a terrible term. Like, you get what’s left over. But it’s true in academics, like this is it. And the result is it is very hard, I think near impossible, for two people in a couple to both be growing at their ideal life at the same time, at the same location. There’s a book that actually dives into what they call the 80% marriage, where you’re both giving up something. And I’m like, well, that’s creating 20% resentment—if you don’t do it right.
So we embrace this Gardener and the Rose, where we take turns between who is growing and who is providing support. My wife’s the Rose right now. She got offered a job 1,200 miles away. We packed the dogs and the cat, we went. Now we’re childfree, we can do that. The hardest part is you got to see two mastiffs in the back of our Prius. That was hilarious. But we just did it and we could. And I think what happens is because you are taking turns, and it’s for a defined period of time. For us, it’s five to seven years, whatever works. You can each lean into the role. The Rose can be a little more selfish because that’s intentional. And the Gardener knows they’ll get their turn. For us, when I’m the Rose, we’re going to get a boat and travel the world. It doesn’t always have to be for the top career. It could be for whatever you want. But it’s a great way to have that structure and be planning your life and your finances together and hopefully be equitable.
Arnott: I’m curious about potential resentment, which I think you mentioned. If you’re the Rose, it sounds like it would be great. You’re blossoming, you’re pursuing your best life, you’re doing what you want to do. But if you’re the Gardener, you’re spending a lot of your time weeding, hauling around mulch and dirt, which doesn’t sound like as much fun. Are there ways to get around that resentment issue so that even if you are trading up and someone only has a Gardener role for five to seven years, that’s still a pretty long time. Is there a way to build in more enjoyment or self-development for someone who is taking on that role?
Zigmont: So, interestingly enough, you may have it little bit backwards. And let me explain this. So, what we tend to find is there’s this moment where the Roses are like, hey, can I really do this? Is it OK if I do this? By nature, can I really be selfish and focus on myself? And we tend not to see as much resentment from the Gardener, but the Rose person is like, are we really doing this? Are you really OK with moving cross-country, or changing jobs, or whatever else it is, to follow my passions? And what happens is if you’ve got good communication in the couple, you can have this discussion of like, well, when I become the Rose, are you OK if I move across the country? Well, yeah. And you start realizing it. And what you find is in most couples, I can ask them straight up, who needs to take a turn as the Rose? The Gardener will point out who needs to be the Rose. The Rose is going to be very reluctant to say it’s me. And what happens is I tend to find that they’ve needed to have a change for a while. I had this discussion with somebody last night and I said, how long ago did you know you had to change your job? And I asked the person, who would be the Gardener, I said, how long did your spouse need to do this?
And her answer was, “Oh, probably six or seven years ago, he should have done this.” And they both kind of laughed, but I’m like, you know you need that change. I think where the resentment comes in, or the hurt feelings, or whatever else, is when people pop into these roles without having the discussion. So I’ve seen this where like, “Oh, well, so-and-so is going back to school, we got to change things around the house, but we have not had the discussion.” I think the other thing we find, which is kind of interesting, is there’s still a bunch of gender norms that are in this. So when I moved for my wife’s job, I was amazed by how many people would be like, you’re moving cross country for your wife? And I’m like, yeah, why not? But it’s those unspoken things that cause issues rather than actually having a plan and talking about it.
Benz: For our last question, I wanted to ask about estate planning and perhaps you can quickly share what you see are some of the best practices for people who do not have kids who want to create an estate plan.
Zigmont: So the biggest challenge for childfree people is actually not even paying for long-term care, but who’s going to make the decisions for you when you can’t? And this is the question of the executor, medical power of attorney, financial power of attorney. And if you’re in California or Arizona, you can appoint a professional fiduciary to fill those roles, but in the other states, you can’t. In other states, it might be a trust company that can do it for you, but the trust companies, once again, are based on a percentage of assets model. And if you’re trying to die with zero, you’re not a great client for them. So we are launching a product later this year—we’re doing all the regulatory fun stuff—that we’re calling the childfree Trust, which is we’re going to be able to serve as childfree folks’ executor, medical power of attorney, financial power of attorney across the country. And it’s interesting because I’ve worked with a lot of different aging groups, and they’re like, we’ve been trying to find answers for decades in some case, and it just doesn’t exist. And it is why people don’t get the paperwork done.
They’re like, I know who I want to get my money to, but who’s going to do it for me? It’s why if you look at the general stats, something like 70% of people do not have a will, medical power of attorney, or financial power of attorney. For childfree people, that’s a must, because if you don’t appoint somebody to make decisions for you, and you don’t have a next of kin, the government or healthcare organizations are making decisions for you. And I don’t care what your politics beliefs are, but I don’t trust the government not knowing me to make decisions for me. And if you don’t put in your will who the money goes to, it can go to the state. These are big issues to the point where with our childfree couples or childfree individuals either, we are putting in their estate plan whenever we talk to them. I got somebody in their 20s and we just finished their estate plan. You have to have something on paper saying what your wishes are.
Benz: Well, Dr. Jay, this has been such a thought-provoking conversation. Thank you so much for taking time to be here, and congratulations on the book.
Zigmont: Thanks for having me.
Arnott: Thanks again, Dr. Jay.
Benz: Thank you for joining us on The Long View. If you could, please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts. You can follow me on social media @Christine_Benz on X or at Christine Benz on LinkedIn.
Arnott: And at Amy Arnott on LinkedIn.
Benz: George Castady is our engineer for the podcast and Kari Greczek produces the show notes each week. Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at thelongview@morningstar.com. Until next time, thanks for joining us.