Podcast Summary: The Long View – Episode Featuring Dr. Jay Zygmont on Handling Finances When You Don’t Have Kids

Introduction

In this engaging episode of The Long View, hosts Christine Benz, Amy C. Arnott, and Dan Lefkovitz delve into the unique financial considerations faced by individuals and couples who choose to live child-free. Their guest, Dr. Jay Zygmont, author of The Childfree Guide to Life and Money and founder of Child Free Wealth, brings his expertise as a certified Financial Planner, MBA, and PhD in adult learning to discuss the intricacies of financial planning without the assumption of parenthood.

Why Focus on Child-Free Financial Planning

Dr. Jay Zygmont opens the conversation by explaining his personal motivation for focusing on child-free financial planning. “[...], I started researching this question of like, are my wife and I weird? [...] I didn't even know the term child free existed at the time and come to find out, I found a subreddit of like 1.5 million people that are child free” ([00:36] - [02:46]). He highlights that approximately 25% of the U.S. population is child-free or permanently childless, yet this significant demographic is often overlooked in standard financial planning literature and practices.

Financial Implications of Being Child-Free

The discussion moves to the financial well-being of child-free individuals compared to those with children. Dr. Zygmont clarifies, “there are people who are struggling who have kids and people are struggling who don't have kids” ([03:03]). He notes that while single childless women have the highest average net worth, the difference isn't substantial enough to create a significant financial advantage. Importantly, he reveals that the gender wage gap virtually disappears among child-free couples: “the wage gap between men and women is about $160 a month” ([04:18]).

Legacy and Wealth Transfer

Dr. Zygmont emphasizes that child-free individuals often do not prioritize leaving substantial wealth to the next generation. He explains, “if you're not trying to pass that money to next generation, it changes assumptions in your financial plan” ([06:02]). This shift necessitates a different approach to financial planning, focusing more on personal fulfillment and less on legacy-building.

The Die with Zero Approach

A significant portion of the conversation centers around the “Die with Zero” philosophy, inspired by Bill Perkins' book. Dr. Zygmont explains that for child-free individuals, this approach encourages maximizing life’s experiences by spending money during one’s lifetime instead of saving primarily for estate transfer: “how can I give, live and enjoy my money throughout my life rather than just passing it after I'm gone” ([09:32]).

Social Security and Demographic Shifts

Addressing Social Security, Dr. Zygmont expresses skepticism about relying on it fully: “I’m not going to get Social Security for another, whatever, 25 years” ([23:39]). He links this uncertainty to broader demographic shifts, noting declining fertility rates and population growth challenges that could strain Social Security’s sustainability.

Financial Advice Industry Biases

The episode highlights systemic biases within the financial advice industry against child-free financial planning. Dr. Zygmont shares, “the entire system is based on this constant growth model” ([25:57]). He critiques how traditional advisors prioritize asset growth to increase Assets Under Management (AUM), which may conflict with child-free clients’ goals to deplete their portfolios strategically.

Annuities and Asset Allocation

When discussing asset allocation, Dr. Zygmont suggests that child-free individuals might adopt unconventional strategies, such as going entirely into fixed income or risk-heavy stocks, since their goals differ from traditional growth-focused plans ([16:14]). He also touches upon annuities, recommending a specific fixed index annuity with a long-term care rider that provides predictable income and addresses longevity risk ([28:56]).

Spending Strategies and Overcoming Behavioral Barriers

Dr. Zygmont explores behavioral strategies to help child-free clients manage their spending effectively. He introduces the concept of balancing personal spending with giving: “we set up a goal and said, all right, I want you to spend X amount of money per year. [...] we're also going to give away X amount each year” ([18:19]). This balance helps clients feel justified in their spending while fostering a habit of generosity.

Long-Term Care Planning

A critical topic is long-term care planning, especially since child-free individuals cannot rely on children for support. Dr. Zygmont advocates for early planning, ideally by one’s mid-40s, due to the high costs and limited coverage options available later in life: “[...] you need to have a solution” ([30:39]). He discusses asset thresholds for purchasing long-term care insurance versus self-funding, recommending around half a million dollars set aside for long-term care needs ([33:56]).

Non-Financial Aspects: Happiness and Life Satisfaction

Addressing the emotional well-being of child-free individuals, Dr. Zygmont shares his findings that 94% of child-free people report being happy, a significantly higher rate compared to the general population ([38:41]). This counters common stereotypes and underscores that choosing a child-free lifestyle can lead to substantial life satisfaction.

Child-Free Midlife Crisis

The concept of a “child-free midlife crisis” is discussed, where individuals reach their financial goals and then question their purpose. Dr. Zygmont advises focusing on personal impact and legacy: “what is your legacy?” ([39:38]). He encourages clients to define meaningful contributions beyond financial success, helping them navigate this existential phase.

Caring for Elderly Parents: Boundary Setting

Dr. Zygmont emphasizes the importance of setting clear boundaries when child-free individuals care for elderly parents. He warns against becoming financially and emotionally overextended: “[...] it's a challenge to get people to make decisions a lot earlier” ([42:37]). Establishing limits helps prevent caregiver burnout and ensures sustainable support for aging parents.

Gardener and the Rose Concept for Couples

Introducing the “Gardener and the Rose” metaphor, Dr. Zygmont illustrates how child-free couples can balance personal growth and mutual support. Each partner alternates between roles, allowing one to pursue personal ambitions while the other provides support, fostering a harmonious and equitable relationship: “[...] you take turns between who's providing support and who is growing” ([45:39]).

Estate Planning for Child-Free Individuals

Effective estate planning is crucial for child-free individuals to ensure their wishes are honored. Dr. Zygmont highlights the need for appointing trusted executors and medical power of attorneys, noting that without children, many rely on professional fiduciaries or may face their estates being assigned to the state: “[...] 70% of people do not have a will” ([51:00]). He announces the upcoming launch of the “Child Free Trust,” a product designed to meet these specific needs.

Conclusion

The episode concludes with Dr. Zygmont’s congratulations and the hosts' encouragement for listeners to engage further with the topics discussed. This comprehensive discussion illuminates the distinct financial planning strategies required by child-free individuals, emphasizing tailored approaches that align with their unique life choices and ensuring financial security and personal fulfillment.

Notable Quotes

• Dr. Jay Zygmont on discovering the child-free community: “I found a subreddit of like 1.5 million people that are child free” ([02:46]).
• On the gender wage gap: “the wage gap between men and women is about $160 a month” ([04:18]).
• Discussing the Die with Zero approach: “[...] how can I give, live and enjoy my money throughout my life rather than just passing it after I'm gone” ([09:32]).
• On Social Security concerns: “I’m not going to get Social Security for another, whatever, 25 years” ([23:39]).
• Highlighting financial planning biases: “[...] the entire system is based on this constant growth model” ([25:57]).
• On happiness among child-free individuals: “94% said they were happy” ([38:41]).

Key Takeaways

• Tailored Financial Planning: Child-free individuals require specialized financial strategies that differ from traditional models focused on child-rearing and legacy transfer.

• Gender Wage Gap Mitigation: Being child-free can significantly reduce the gender wage gap, fostering greater financial equality between men and women.

• Legacy Reimagined: Without children, legacy planning shifts towards personal impact and charitable giving during one’s lifetime.

• Behavioral Adjustments: Encouraging balanced spending and giving can help child-free individuals enjoy their wealth without financial anxiety.

• Long-Term Care: Early and strategic planning for long-term care is essential for child-free individuals to ensure autonomy and financial stability in later years.

• Estate Planning: Appointing trusted executors and establishing clear estate plans are critical to safeguard one’s wishes and prevent legal complications.

This episode serves as a valuable resource for child-free individuals seeking to navigate the complex landscape of financial planning, offering practical advice and innovative strategies to achieve financial independence and personal fulfillment.