Statistics tell us that around 15%1 of adults never have children, yet most retirement planning advice assumes everyone follows a traditional family path. This oversight leaves many couples wondering how to tailor their retirement spending strategies to their specific lifestyle needs. The conventional wisdom about retirement spending often misses the mark for child-free couples, who typically face different financial considerations and opportunities.
Money flows differently when you’re planning retirement without factoring in generational wealth transfer or supporting adult children. From healthcare considerations to lifestyle choices, couples without children can approach retirement spending with distinctive strategies that align with their unique goals and circumstances.
Understanding Your True Retirement Number
Traditional retirement calculators often fall short for non-parent couples by including assumptions about college savings and inheritance planning. A more accurate assessment of retirement needs should consider your specific lifestyle choices and goals.
When determining your retirement number, consider how your spending patterns might differ from traditional models. Without expenses like supporting adult children or saving for grandchildren’s education, you might allocate more resources to personal interests, travel, or premium healthcare options.
The absence of family-related financial obligations doesn’t necessarily mean you’ll need less in retirement – rather, it means you have different priorities to fund. Many couples without children choose to invest more heavily in experiences, hobbies, or philanthropic endeavors. Understanding these unique spending patterns helps create a more accurate retirement number that reflects your actual lifestyle aspirations.
Structuring Your Retirement Income
Creating a reliable income stream requires careful planning and consideration of various sources. Social Security optimization becomes particularly important, as you have more flexibility to delay benefits for maximum payout without considering legacy planning for dependents. Your investment strategy might focus more on generating current income rather than preserving capital for future generations.
Investment income can come from multiple sources, carefully structured to provide regular, reliable cash flow. Dividend-paying stocks can offer growing income streams that help combat inflation. Bond ladders provide predictable income at regular intervals, while real estate investments might generate rental income. The key is creating a diversified income strategy that aligns with your specific needs and risk tolerance.
Spending Phases in Retirement
Retirement spending typically evolves through distinct phases, each requiring different financial approaches. The early “active phase” often sees higher spending as couples pursue travel, hobbies, and experiences. Without the traditional constraints of family obligations, this phase might last longer and involve more extensive travel or pursuit of expensive hobbies.
The middle “maintenance phase” usually brings more stable spending patterns, focusing on lifestyle preservation while preparing for future healthcare needs. During this time, many couples find themselves adjusting their activities but maintaining significant social and recreational expenses.
The later phase often brings increased healthcare costs, requiring careful planning for professional care services. Without children to provide care support, budgeting for high-quality professional care becomes essential. This might include provisions for in-home care, premium healthcare services, or high-end continuing care retirement communities.
Strategic Tax and Healthcare Planning
Tax efficiency plays a crucial role in retirement spending strategy. A well-planned withdrawal strategy considers the tax implications of different account types. Traditional retirement accounts, Roth accounts, and taxable investments each play specific roles in tax-efficient income generation. Strategic Roth conversions during lower-income years can provide tax-free income later, while careful management of required minimum distributions helps minimize tax burden.
Healthcare planning takes on special significance for couples without children. Long-term care insurance becomes more crucial, as does planning for potential medical expenses. Consider setting aside specific funds for future healthcare needs, perhaps through a Health Savings Account if eligible. Many couples also explore premium healthcare options or medical concierge services to ensure high-quality care in their later years.
Legacy Planning Reimagined
While traditional legacy planning focuses on generational wealth transfer, couples without children often take a different approach. Many choose to create meaningful legacies through charitable giving, establishing foundations, or supporting causes they’re passionate about. This might involve structured giving strategies that provide tax benefits during retirement while creating lasting impact.
Estate planning takes on a unique character, focusing perhaps on friends, nieces and nephews, or charitable organizations. Some couples establish charitable remainder trusts, which provide income during retirement years while benefiting chosen causes later. Others create scholarship funds or endowments that reflect their values and interests.
Work With Us
The journey to creating an effective retirement spending plan requires careful consideration of your unique circumstances and aspirations. While traditional retirement planning often centers around family legacy, couples without children have distinct opportunities and considerations that deserve specialized attention and strategic planning.
At Purposeful Wealth Advisors, we understand that your retirement vision may look different from the conventional path. Our team specializes in creating customized financial strategies that align with your specific lifestyle choices and goals. Ready to develop a retirement spending plan that truly reflects your priorities? Contact us today for a personalized consultation. Let’s talk about how to make your retirement vision a reality.
1United States Census Bureau, Childless Older Adults More Educated, More Likely to Live Alone Than Older Parents, https://www.census.gov/library/stories/2021/12/no-kids-no-care-childlessness-among-older-americans.html?
Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. You should discuss any tax or legal matters with the appropriate professional.
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Purposeful Wealth Advisors and not necessarily those of Raymond James.
