4 things we're doing to prepare for retirement without children
Kevin Zolitor
Life is complicated — and so is money. Here, David Auten and John Schneider discuss how they're preparing for a major life change as a childless family.
Families have always come in different shapes and sizes. Over the last few years, our country has legally recognized that.
As a same-sex couple without children, one of our main financial concerns is preparing for the latter portion of our retirement years.
Traditional families can often rely on their younger offspring to take care of them, to a point, as they age.
My grandfather was able to die in his home at age 93 because his three children cared for him.
Childless couples, however, must prepare appropriately, because we won't have children to nurse us.
With our years in financial services and our work in queer finance, we think these four points are critical to long-term financial success.
Flickr / Dan Previte1. Pay off your mortgage
Today's retirees are retiring with more debt than their predecessors. The majority of that debt is mortgage debt. A report by the Employee Benefits Research Institute showed that between 1992 and 2010, the number of 75-plus age households with mortgage debt increased from 10% to 24%.
This is due to a combination of Americans buying their dream homes later in life, upsizing their homes even as they approach or reach retirement, and taking loans against their homes.
After paying off over $51,000 in credit card debt, we'll never let debt put our financial security at risk again. We don't want to be in the predicament of having our mortgage payment compete with our medical care or our dream of retirement travel. We also don't want to reach a point when we have to consider moving out of our home because we can't afford to live there anymore.
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2. Be clear about what retirement means to you
The best decision we ever made was deciding what we most want out of life. This gave us the focus and determination to get out of debt and has given us the stamina to stay out of debt. We got into credit card debt because we spent unconsciously. In hindsight, we didn’t acquire that debt living authentically. We followed the crowd.
The same goes for our retirement. The definition of retirement has changed nearly as much as the definition of marriage. Some retirees manage their lifelong jobs on a smaller scale. Some take on new careers or dive into charity work. Some spend their years on the links, others on the porch.
We want to continue traveling the world as long as we can. We can't have it all and, therefore, we must plan accordingly. If we try to have it all and live unconsciously again, we'll outlive our retirement money.
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3. Address long-term care
Long-term care (LTC) is one of the more complex components of medical expenses, because it requires other people. LTC can range from help at home with basic needs, such as cooking, eating, and cleaning, to retirement villages that handle physical labor, to assisted living, which focuses on a person's physical well-being.
It's critical to understand our expectations at various stages of our lives and health. Life, of course, may have other ideas. We need to know what we want if we're going to have any chance of living out our remaining years on our terms.
Because we don't have children, we won't have the option to defer or completely avoid LTC expenses like my grandfather. We need to plan for such expenses now; the average nursing home costs about $80,000 annually for a semi-private room.
With insufficient finances or insurance, decisions on how we're taken care of may be left to the state or a guardian assigned to our care. We want to live out our remaining years on our terms, not those of some third party.
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