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Kids Causing Retirement Crisis?
Old 07-15-2015, 02:28 PM   #1
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Kids Causing Retirement Crisis?

I was just riding on an elevator at w#@k, one that has a small video screen flashing the day’s headlines and stock quotes.One headline posed the question of whether kids are causing a retirement crisis. It was followed by a statement that said that married couples without kids have about 10% more wealth that married couples with kids.I just kind of nodded my head (duh!), and wondered how much they spent coming to the conclusion that having kids leads to less wealth. I was a bit surprised at the 10% number, though. Based on my experience, that number should be a lot higher.
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Old 07-15-2015, 03:13 PM   #2
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I keep detailed records of my expenses, and I have 5 kids at home right now ages 15-28. The 28 y.o. is here temporarily. YTD 2015 my kids have a direct cost impact of 31% of my total expenses! That doesn't count indirect costs of 5 kids, such as bigger house, bigger van/car, MORE GROCERIES, bigger bills eating out, bigger rentals on vacation, etc., etc. I would say the total effect is 6-10% per kid.
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Old 07-15-2015, 03:18 PM   #3
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I keep detailed records of my expenses, and I have 5 kids at home right now ages 15-28. The 28 y.o. is here temporarily. YTD 2015 my kids have a direct cost impact of 31% of my total expenses! That doesn't count indirect costs of 5 kids, such as bigger house, bigger van/car, MORE GROCERIES, bigger bills eating out, bigger rentals on vacation, etc., etc. I would say the total effect is 6-10% per kid.

Five children is alot for any family. I got a giggle from your online name.
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Old 07-15-2015, 03:36 PM   #4
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It's those pesky child labor laws.
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Old 07-15-2015, 03:42 PM   #5
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Since some of those kids are making the stuff that I want to use, even though I'm no longer doing any "economic" work, I'm glad that somebody decided to have kids.
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Old 07-15-2015, 04:02 PM   #6
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With my one kid comes 2 grandkids. They're taking my wife's complete retirement income.
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Old 07-15-2015, 04:36 PM   #7
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I suspect that for equal income couples, one with & one w/o kids, that the ones with don't have as much discretionary spending that keeps their net worth/wealth higher than we might expect. Fewer less extravagant vacations would be a start.
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Old 07-15-2015, 05:58 PM   #8
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My college-age son is home for the summer. We keep no food in the house that he likes, hence he uses his paycheck to go buy food. We also keep the car gas tank empty, so he uses his paycheck to fill it up.

When he was younger, he learned to eat at his friends house.

Or one can do this: Tell him that he can invite his friends over to watch TV, but with no food in the house, the smart phones come out and food starts appearing at the front door. There is always enough for the the parents to eat, too.

There are some expenses, but mostly paid to a college.

Bottom line: Turn your kids into an asset and not a liability.
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Old 07-15-2015, 06:25 PM   #9
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latex man - my hometown is Rockingham, NC. You probably know where that is!

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Old 07-15-2015, 08:35 PM   #10
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martyb,

Of course. The home of NC's premier drag racing facility!
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Old 07-15-2015, 09:10 PM   #11
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But think of all the long-term-care costs you will save, what with the children taking care of your old and feeble selves-
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Old 07-15-2015, 10:34 PM   #12
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But think of all the long-term-care costs you will save, what with the children taking care of your old and feeble selves-
I've been watching my daughter take care of her old cat. I really don't want her taking care of me someday.
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Old 07-15-2015, 10:54 PM   #13
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I've been watching my daughter take care of her old cat. I really don't want her taking care of me someday.

This is my entire plan for avoiding being a caretaker for my parents!
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Old 07-16-2015, 06:50 AM   #14
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I'm surprised at the low number too. If we had banked the cost of the kids we would certainly be flying first class today. But I don't see any crisis.
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Old 07-16-2015, 07:34 AM   #15
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Here is the Forbes article of 7/14 that announces the 10% difference Are Kids Causing A Retirement Crisis? It is based on a study carried out in 2009, here http://www.ssc.wisc.edu/~scholz/Research/Children.pdf

Aren't there more important things to study?
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Old 07-16-2015, 07:42 AM   #16
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Silver (the color of your hair),


Ah! My fetish? Not really, Screen names The same thread you explained your handle.
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Old 07-16-2015, 10:22 AM   #17
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Perhaps it is strange that my first thought was NOT how much it takes to birth, house, feed, clothe, school, etc. etc. kids from birth to 18 (or 22?). Rather I thought of kid's impact on SOME parents after kids would (otherwise) supposedly be GONE. IOW the effect of adult(?) kids when mom and dad DO actually reach the time to retire.

I know so many couples who have either NOT retired because of the needs of their adult children (including "needs" of the grand kids) or have retired and then been virtually bankrupted by the "needs" of their kids.

Just among our close friends: One couple sent their adult son to 1) welding school 2) two different undergraduate programs 3) graduate program 4) certification training for physical therapy. The kid was married with two children and in his early 30s before he EVER took a job beyond mowing lawns, etc. The couple eventually retired as virtual paupers. Don't know what happened to the kid as we have lost track of our friends. We could no longer spend evenings with them, listening to their continuing tales of woe. They never listened to our advice but they did ask us for money (a good way to kill a friendship.)

A current friend who w*rked with me at Megacorp retired very early (age 50) with a "package" which I was not eligible for at the time. That was 22 years ago. He is still bailing out (literally) his dope smoking son. He supplies son with cars so he can get to w*rk to meet the requirements of his release. Son recently got a DUI and had a firearm in the vehicle - and then resisted arrest. To save his son from a year in jail, friend paid for ankle bracelet/monitoring system and AGAIN got him a car so he could find a new job. Friend can barely feed himself and wife and keep his own car and house going. Friend's wife spends hundreds of dollars per year purchasing "gifts" for their daughter who is a professional with good salary. These folks have ruined their retirement because of the perceived "responsibility" toward their kids.

Another couple just retired at 62. At the end of the month, they eat whatever is left in the pantry (tuna helper, mac and cheese, canned foods, etc.). Their two daughters (about 30 and 35) consume most of the "spare" money and almost all of their time. The 35 yo is a professional, but "expects" mom and dad to drive 60 miles, one way, to baby sit so she and hubby can go out. 30 year old, still recovering from a destructive divorce expects mom and dad to keep her horse boarded and supply her with a farm truck and a car so that she can work her medial job but still ride her horse. The couple HAD to purchase a 5th wheel camper (and a big truck) so that the extended family could take vacations together or just go camp at the lake most week ends.

I could go on, but, full disclosure, we have provided each of our kids with either a house down-payment gift or business-starting gift in the range of $10K to $20K. The difference is that the gifts were in our plan and they do not materially affect our retirement. It's true that we don't (yet) fly first class and our gifts certainly could have made that possible. But, in truth, we could still fly first class but choose not to. Additionally, we give each kid at least $1k per year toward their Roth IRAs. ALSO in the FIRE plan.

Now returning you to our regularly scheduled discussion of those who have delayed retirement due to the costs of actually raising kids from birth to "adulthood." YMMV
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Old 07-16-2015, 12:10 PM   #18
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This thread reminds me of a bumper sticker;
I love my ungrateful, rotten children.
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Old 07-16-2015, 12:11 PM   #19
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My college-age son is home for the summer. We keep no food in the house that he likes, hence he uses his paycheck to go buy food. We also keep the car gas tank empty, so he uses his paycheck to fill it up.



When he was younger, he learned to eat at his friends house.



Or one can do this: Tell him that he can invite his friends over to watch TV, but with no food in the house, the smart phones come out and food starts appearing at the front door. There is always enough for the the parents to eat, too.



There are some expenses, but mostly paid to a college.



Bottom line: Turn your kids into an asset and not a liability.
This clever and hilarious!
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Old 07-16-2015, 12:15 PM   #20
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Sure kids cost money.... but it does not mean that a family cannot save...

It is still the spending that is the problem... people spend how they wish to spend... either on themselves or their kids... OR they save...
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