Wife and I have been trying to use as big a shovel as we can because we were planning to have kids a few years down the line in our 30s. Well, now we’re 33/32, and first kid is coming next year. I imagine this will come with a lot of expenses that may affect our savings rate, but we will try to maintain what we’ve been doing as DINKs the best we can.
My questions for you all are:
- How did having kids affect your savings rate and FIRE timelines?
- Anyone here have kids and were still able to retire in your 40s?
- Is it even worth retiring in 40s when kids are still living at home?
Thanks for reading this and looking forward to everyone’s thoughts.
Kids in 30s and retirement in 40s. Anyone do this and is it even desirable?
byu/ComprehensiveEbb4978 infinancialindependence
Posted by ComprehensiveEbb4978
22 Comments
Teens are really really expensive. Well they aren’t but if you have money are you going to say “sorry honey no guitar lessons or sports because daddy and mommy are retired?”
1. Kids cost money. Savings rate reduced, fire timeline increased. Of course.
2. Probably, but they were probably making decent money before and during.
3. Sure, why not? Spend more time with your kids. You only have a sliver of time with them in the scheme of things.
I’ll say this – kids pushed out retirement for us by a few years. Maybe 5+? Our expenses increased maybe 20%. I want to say our spend went from 80k to 115k but also hard to specifically say that is due to kids as inflation has also been a big part in recent years.
Don’t have kids yet myself but for #3 I can say as someone whose parents moved from typical employment to much laxer self employment when I was in my low teens it was very nice to see them more often, do whatever activities we wanted within reason.
I think retirement should not be on your mind when your wife is pregnant and you are in your 30s. If it is, it may mean you are in the wrong job. You are about to embark on a wonderful adventure: being a parent. Enjoy your life, enjoy your child, enjoy your work! There is no magical pot of gold in the retirement rainbow. There are ways to use your life energy for good in the world.
I have no idea what my savings rate was in my 30s. I took some time off to be at home and I started back in a low stress job so I could focus on my family. Then as I grew into my 40s, I increased my earnings and saved a lot more without changing our lifestyle and I find now in my 50s I am on track for a healthy and funded retirement. I would encourage you to live your life in the present and not be obsessing about the future.
When your kids are in high school and college is when your expenses will be the highest. I had every intention of retiring when I hit my number. Two things happened – COVID inflation pushed my number up, and I decided to keep working until I get the kids out of college. I’m 47 and will probably work until 55 depending on how long it takes to get them off the payroll.
I’ll be FI, just not RE, because I feel like it’s much harder for kids entering the workforce now than when I did and I want to make sure my kids are set up for success. I’m willing to trade more time working for that goal.
I have two kids who were born when I was 29 and 32. I retired at 37. I’m 43 now. So far so good.
Being able to spend time with the kids has been a big benefit of being retired, so I’m not sure what you mean by “is it even desirable”. Are you already planning to dislike your kids?
There are so many variables to this it is hard to really say for your specific scenario.
People retire early and comfortably with kids all the time. If that is your goal, you need to plan accordingly which is pretty much the same for everyone: income up, expenses down, and invest the margin. Obviously there are costs associated with raising a kid. Navigate them according to your values.
We had our kid at 35, I retired at 46, wife could be done but wants a sign from the universe before letting her career end.
I was saving for retirement since early days without a specific goal date, just the reality that I was in tech and grew up seeing all the ageism and layoffs of the 80’s and 90’s. Once my job became more and more stressful I put a proper plan together, but that was around when he was in kindergarten. We had a lot of twists and turns along the way, with my wife going back to school at 30, her being a SAHM for 5 years, and now me being retired fully.
So in my experience it is wise to get money in the bank, live below your means, and not focus on a target date with rigidity. Money gives you power and flexibility in the face of bad bosses and unpredictable job issues. With any luck you get to be FI before you become desperate to RE.
The kids do not cost a ton on a day-to-day basis but we had to make several changes as we had more kids. There are obvious costs for food and clothing but I found these were not significant as we cook from home and could get second hand clothes for very cheap. There were bigger costs:
First – we had to upgrade our apartment size from a 2 BR to a 3 BR when we had our second child and now with a third we are looking to grow even bigger which obviously increases mortgage / rental costs.
Second – we had to upgrade to a full size vehicle. We went from a paid off sedan to a full size car with significant monthly payments.
Other things that routinely cost money are monthly 529 deposits and hobbies for the kids. I’m sure there will be things like insurance, dental.
I can’t travel as easily now and do not have as much disposable income but it is totally worth it! Kids are a greater treasure than any amount of money I could possibly set aside.
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He did exactly that many years ago (15-20?), and is still retired.
Late 30 is old for kids. For 1 kid it may be ok, for more, no. Kids are expensive, teenagers are expensive. You will find out soon. Also, make sure you increase your insurance coverage the moment the bun is in the oven. Pregnancy is risky and expensive.
My wife and I are 33 with two kids. We plan to retire in our 40s.
If you are doing daycare, start looking now and putting deposits down if there are wait lists. Depending on CoL, fulltime infant daycare can run 1500-4000 a month.
Some people choose to start using housekeeping and landscaping services after having a kid to help with recurring chores.
Formula (if needed), diapers, baby clothes (that only last a couple months) are some of the things you will go through very fast. They can definitely add significantly to regular shopping bills.
There are also plenty of things people buy just because they want the “best” for their kid without actually adding any value. People don’t really have to buy the $800 crib, the $400 baby monitoring system, the organic hand-made ultra pure butt wipes, etc. etc.
Overall, there is a minimum cost to having a kid, but there are definitely dimishing returns after taking care of the essentials.
Having a kid is an adventure. For me, it was like starting life over again with a whole new outlook. Best of luck to you!
1) We had our two kids in our early 30s. Our savings rate went down with daycare expenses, but we plan on upping our contributions once they are in school.
2) We are on track to reach FI/RE in our early 40s. It helped that we had a large chuck of money saved before having kids, so th reduced contributions didn’t effect our timeline much.
3) I think its worth it to be able to spend more time with your kids when they are in their early double digits. Being able to go to every activity, take summer adventures, etc is going to be amazing.
Day care costs are more than college when you consider the time component. Especially if you need it before the age of two. I’m spending 15k a year right now. If all that went into investments it would more than pay for their college. If you’re expecting within the next 6 months to need day care you should tour them now because it is extremely limited.
We were in a similar boat. Saved heavy in our 20s, had babies at 31 and 33, and could have retired in around now at mid 40s.
We had the talk about the point of life being to give these kids an amazing life. Decided that what would be the point in retiring to be tied to home and school anyway, so their high school graduation day is our new retirement day. We have worked in a few epic trips, the kids play a bunch of sports, we are working a new cabin into the deal. We made life bigger instead of retirement, and we are pretty happy with how things are going.
Kids are cheap except for daycare or private school tuition if you need it and college.
If you or your spouse can be SAH or you have flexible schedules and you live in a decent school district then college is all you have to worry about. That said, if you’re in any realistic position to retire in your 40’s you should be able to park $100K per kid into a 529 when they’re born and be fine for college no matter where they want to go.
I’m planning on fully retiring when my youngest finishes high school. I may go part time at some point but I value the combination of health benefits, overall safety net, and what you mention about the kids living at home. With kid(s) in the pictures, youll constantly be adjusting your budget. Over the next few years you’ll start to view money differently. Make a plan, review it frequently, and readjust when necessary. Spend a little more time and money on experiences with them.
I was 35 when we had our first. I’m now 42 and we just had our fourth (and final) in July. Having kids later in life definitely helped when it came to setting the foundation for FIRE; I’m on track to retire by 50, but if I’m still WFH by then I’m not sure if I will, just because I rather enjoy my job and still get to see my kids all the time not being at an office.
I was 33 and my wife was 31 when we had our first and 35 / 33 for our second. I technically retired in my 40’s thanks to some six figure exits and then buying this thing called Bitcoin when it was $1.00. I still “work” a lot as an investor actively managing our assets and my wife works part time because she enjoys what she does.
To answer your questions:
1. Yes, kids are expensive.
2. Yes.
3. Absolutely. I get to spend a ton of time with my boys who are both amazing.
Stopped working at 41 when my kid was 4.
Yes, it’s worth it to stay home when kids are little are you planning to not like your kids? What a strange question.
If it wasnt for covid and being able to work remote I was going to retire 4 years ago when I hit my number. I really love being a Dad surprisingly, those first years before they get in school are amazing. It did impact our savings rate but we were so far into FIRE from massively over-saving in the 20s that it ended up not mattering too much. But I did struggle getting used to the reduced savings for a while. Looking back on things I could have spent more but the kids dont know any differently they are there for the parents. So I’d say the regrets are still possible for how they turn out in terms of themselves as people/work ethic etc but for me being there, present, available, no regrets at all.
My kid was born a few weeks before my 30th birthday. He’s actually what prompted me to really focus on our finances.
1. Of course kids have an impact on savings rate. They’re expensive, even if you’re mindful about spending. However, kids don’t have to be as expensive as most people make them out to be. We got everything secondhand, relied on nearby grandparents, and used a mother’s day out instead of traditional daycare, all of which made the first years incredibly cheap.
2. I’m on track to retire by 50. It was 45, but we decided to move up in house at the cost of a few extra years of work.
3. Why wouldn’t it be?