By Allen J. Davis, CFP®
As her parents listened from the other room, five-year-old Nancy chattered to her family of dolls: Mommy and Daddy, little Clara, and younger brother David.
Several decades later, these parents hear something quite different from Nancy. Their 35-year daughter has been living happily for more than five years with her boyfriend, Damon. Neither has shown any interest in tying the knot. Now Nancy casually mentions that she and Damon have decided they don’t want kids. So much for Clara and David.
When we launched our financial planning firm in 2002, few of our clients had stories like this one. They hoped for a comfortable retirement, family support they could count on in old age, and someday passing on whatever remained of their wealth to the next generations.
Things Have Changed
Some people can still build financial plans based on similar assumptions. But a growing number of clients have situations that look quite different.
- Their children live far away. If these sons or daughters started a family, they waited until they
were older to do so. That means they’ll have limited bandwidth to help their elderly parents,
now or in the future.
- Their family is a hybrid of adult children and stepchildren, spouses, unmarried partners, even ex-partners or ex-spouses who are still part of the family unit.
- There’s no third generation (or fourth) to plan for―or to help the aging parents someday.
- The client is a Solo―one of a growing segment of older adults who, by choice or chance, are
aging without a spouse or partner or helpful adult children. Today, about one quarter of our
clients fit this profile.
These scenarios have implications for financial planning: Should you move somewhere smaller or closer to family, or plan to age in place? How much help will family members be able to provide, when and if it’s needed? How much money will it take to ensure your secure retirement and future care? What do you hope to pass on as your legacy, and to whom?
Today, the doll family’s household looks quite different.
It started (of course) with the Boomers.
- Boomers married later and are more likely to divorce than their parents’ generation. As a result,
a woman born between 1954 and 1959 will spend about half (51 percent) of her adult life
married, compared to her mother’s generation of women born 1931-1941 (69 percent).1
- Just 3.9 percent of women born 1931-1941 never married, compared to 12.2 percent of female Boomers born between 1954-59.2
- Almost one in five (19.6 percent) of the youngest Boomers, born between 1954 and 1966, was childless in 2018, compared to 15.9 percent of those born 1944 and 1953 and 10.9 percent of pre-Boomers (people aged 75 or older).3
- Boomers are also more likely to live alone. Today, 27 percent of people aged 60 or older live alone, compared to just 13 percent of that age group in 1970.4
Among Millennials, marriage and fertility rates have plummeted even further.
- By age 35, almost a third of young women today have never married. . Even among 50-year-old
women, 15 percent have never married.5
- Among childless adults aged 18-49, 44 percent say they are not too, or not at all, likely to have
children in the future.6
These Trends May Impact Your Financial Future?
Back in the day, Nancy’s parents (still married to each other) would have relied on each other and their grown children for caregiving and routine help. In turn, the parents might have set aside some share of their accumulated wealth to benefit their children and grandchildren.
When we started out as financial planning professionals, the industry was built on traditional expectations. We’ve watched those models grow out of date. You, like many other mid-life adults, may have different assumptions about the future. Your financial plan should reflect your unique situation and what you want―and need― in life. Look for a financial planner who understands your personal circumstances, rather than operating on outmoded assumptions.
1 Alicia H. Munnell, Geoffrey T. Sanzenbacher, and Sara Ellen King, Do Women Still Spend Most of Their Lives Married? Center for Retirement Research, Boston College, 2017.
2 Munnell et al.
3 Profile of Older Americans 2018, The Administration for Community Living, 2018.
4 Lyman Stone, 1 in 4: Projecting Childlessness among Today’s Young Women, Institute for Family Studies 2022 https://ifstudies.org/blog/1-in-4-projecting-childlessness-among-todays young women#:~:text=About%201%25%20of%20women%20over%20the%20age%20of,are%20ambiguous%3B%20they%20might%20be%20childfree%20or%20childless.
5 Stone 2022. https://ifstudies.org/blog/1-in-4-projecting-childlessness-among-todays-youngwomen#:~:text=About%201%25%20of%20women%20over%20the%20age%20of,are%20ambiguous%3B%20they% 20might%20be%20childfree%20or%20childless.Stone
6 Anna Brown, Growing share of childless adults in U.S. don’t expect to ever have children. Pew Research
November 2021 https://www.pewresearch.org/short-reads/2021/11/19/growing-share-of-childless-adults-in-u-sdont-expect-to-ever-have-children/
Allen J. Davis is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC, member SIPC. Supervisory Office: 330 Whitney Avenue, Suite 600, Holyoke, MA 01040, Tel: 413- 539-2000. The Davis Financial Group, LLC is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies.
If you’re ready to take that next step in your financial planning, consider booking a complimentary consultation with us to see how we can help you to create an intentional plan and partner with you on your financial journey.
Stay warm during these winter months!
Allen for the team at the Davis Financial Group
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