Early Retirement with Kids

This is a guest post by Robert, who lives in Calgary and works as a financial adviser. He is married, has three kids and plans to retire at age 35.  Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.

I have three young children, ages 2, 4 and 6. They are a big part of my life, and all I know about trying to retire early is intertwined with having children. In some ways, having kids makes it harder to retire early, but in other ways they make it easier. There are lots of ways that parents could spend bundles of money based on having children. On the other hand, children prevent parents from spending bundles of money on themselves. Without suggesting that there is any one “right” way to do it, here is how we approach saving money while having kids.

One of the choices we made early on was not to get cable. It reduces our monthly costs, but there is also the benefit (as I’ve noticed when the kids watch shows on cable elsewhere) that they don’t see advertising. This past week, while we’ve been on vacation, my oldest has sat in front of the TV while each advertisement for toys plays, saying “I want that, I want that, I want that.” There is no chance that we’ll get cable at home. Instead, we watch DVDs, some of which we bought at garage sales, some of which were gifts from grandparents, some of which we borrow from the library. In each case, there is little or no cost, but the kids still get to enjoy watching many different shows.

The library is actually one of my favourite places. For a nominal annual fee of $12, we have almost unlimited access to books, CDs and DVDs. It’s an indoor place to go during the winter and has the additional benefit for the kids that if they learn to love reading, it will boost their academic performance. We have internet and a computer at home, but if we didn’t, the library also provides access to computers with office software and internet access.

We take our kids to a variety of local playgrounds. In fact, we chose our house based on it’s proximity to a large playground and a community lake. Having these amenities nearby avoids wanting to build a playground in the back yard or wanting to put the kids in activity classes. Eventually, they’ll probably play community soccer or basketball, but we won’t put them in expensive and time-consuming sports like hockey. They can develop social skills while playing in an unstructured setting outdoors.

We are very fortunate to have high quality public schools, which our kids will attend. In each of these areas, we benefit from public goods and programs which are free or almost free and available to all. I want to be able to spend time with my kids while they’re young, not only when they’re teenagers and no longer want to be close to their family. It reduces the cost of programs and nannying, but it’s also what makes early retirement worthwhile for me.

The children do impose some limitations on the things I would otherwise choose to do with my time and money. I won’t take them to eat in expensive restaurants because they wouldn’t be well-behaved, but also because it would be wasted on them. I wouldn’t take them on vacation to Europe for sight-seeing, because the airfare and hotel cost would be prohibitive and it wouldn’t be memorable for them. Instead, on the occasions we eat out, it’s generally fast food (or Asian food) that is quick, inexpensive and casual. Our family vacation has been to Phoenix during spring break, where we have friends and cousins for the kids to play with, family activities and people to stay with.

There seems to be little comparison to retiring early with and without children. Both are possible, but each will be a different journey. Without debating whether or not a person should have children, which is a personal choice, how has having or not having children has affected your journey?

20 thoughts on “Early Retirement with Kids”

  1. Well, living below our means (saving 5k per month) is the biggest factor allowing us thoughts of extreme early retirement, but our decision not to have kids is a close second.

    Pulling off early retirement can involve a significant scaling back of lifestyle…. is it fair to put children into this scenario?

  2. “Pulling off early retirement can involve a significant scaling back of lifestyle…. Is it fair to put children into this scenario?”

    In my mind, it’s very fair. I’m not convinced that scaling back from spending $6000 / mo to $3000 / mo can be seen as a hardship (with a world-wide perspective). At the same time, I expect to have more time and energy to spend with my children, which is a significant advantage to them over families where both parents work.

    Again, I’m not arguing for or against having children. It’s not my place to decide for anyone else. I’m simply saying that it’s doable with kids.

  3. Having parents that have retired early(early 50’s) and us just having a recent addition(10mth old) it has actually brought my wife more on board with early retirement. She see’s how my parents have time to play with our son, and can contrast that with her parents, who don’t have the time. I pointed out that I’d like to retire early so we would be able to provide that same support to our children’s family, a light went on! She’s way more on board now and has started talking about how we can pay down the mortgage quicker!

  4. Beautiful post. You echoed some comments I recently had on one of these PF sites about eating out. We prefer to go to fast and fun food with our families, not because it’s cheaper but because it’s more fun!

    I would add one thing: The lifestyle isn’t bad. You mention that having children changes the choices you make, like not going to Europe. Yes it does, but that doesn’t mean it’s worse or bad. There is no hardship — at least for us, and we have kids of exactly the same ages. A road trip to Nova Scotia or camping with the family is just as much fun as a trip to Europe. Plus, we’ve even been to Europe with two of our kids. Are museums and churches really that awesome 🙂

  5. PerfectDad, your comments about eating out were made here and your entire discussion with deegee on this subject helped me create this post. I had been thinking about it for some time, but it hadn’t come together yet. Thank you both.

    I appreciate you pointing out that “different” is not necessarily “worse.” I’ll eventually get to Europe because in my experience, the churches and museums are awesome. It’ll just come when the kids are old enough to leave at home with family for a couple weeks.

  6. I have said it before and I will say it again – unless your kids are generating more revenues than expenses, having kids will make an early retirement more difficult. Not impossible, of course, just more difficult.

    If you were able to retire early with kids, then you were always able to retire early without them. But the reverse is not always true. For me, an early retirement would have been impossible if I had kids, as I would not have been able to cover their added expenses with my revenues while still being able to retire early.

    And it is not like I live a lavish lifestyle like many people think we childfree live. The last time I was in an airplane was in 2003 when I attended my grandfather’s funeral, hardly a vacation. Except for an annual Thanksgiving drive to my brother’s place about 200 miles away, I never venture more than 50 miles from home. I very rarely eat out and have inexpensive hobbies.

    I would not be able to offset the added expenses of children with a more frugal lifestyle. On the contrary, my expenses would rise dramatically just due to added food, clothing, housing, and medical expenses.

  7. @Robert “…in my experience, the churches and museums are awesome.” You’re right, the first 20 or 30 are pretty awesome, it’s only the last 300 or so that you see that start to get a bit repetitive. Wife and I went to South America as well, and similarly the first 20 temples and Inca ruins are cool but the last 300 are repetitive 🙂

    @deegee: I think that’s probably right. Although kids are great they may put someone over the edge as far as retirement planning if they borderline. I just assumed that most people who wanted to be very aggressive with a retirement schedule were far from the borderline. They are not that expensive if you have discretionary spending — you would simply be reallocating that discretionary spend to family-friendly choices. But if you have no discretionary spend then yes, the kids do consume food and clothes at least. Even though it’s not as much as people claim and it’s not simply added to most people’s bills, it would be a hardship to someone who is already at the limit. I’m just surprised to see this argument from people who are retiring very early because it means that they’re accomplishing the retirement by eliminating almost all discretionary spend.

  8. deegee, you said: “I have said it before and I will say it again – unless your kids are generating more revenues than expenses, having kids will make an early retirement more difficult. Not impossible, of course, just more difficult.”

    I can’t argue with that. The same could be said of eating in restaurants, shopping, owning a car, owning a house, traveling, and a large number of other choices we make. I hope that people will make those choices for reasons that are not primarily financial, such as interest, enjoyment and values. While still accounting for the financial effects.

    In your case, you were able to retire because you had no children. I will be able to retire despite having children. I only hope that people who are deciding to have children will base their choice on their desires and values rather than the monetary consequences.

  9. Actually, Robert, I wish more people who are deciding to have children would base their choice on the monetary consequences instead of their desires. We have way too many people, especially poor, unwed women, who have kids for all the wrong reasons while having no means to support them, and then the taxpayers, both childed and childfree, have to pick up the tab.

    Perfect Dad, I knew when I was 20 years old that I did not want to have kids. It wasn’t until 15 years later, as I was amassing a small but growing fortune, fif I realize that I could retire early. That being said, I would advise anyone who wants to boost his or her chances of retiring early to choose to be childfree.

    And Perfect Dad, when you wrote, “Although kids are great…” you really meant to write, “Although kids are great FOR ME….” or “I THINK kids are great….” because I and many of my fellow childfree people do not think kids are great.

  10. @deegee: … you really meant to write … because I and many of my fellow childfree people do not think kids are great.

    I don’t think my line would convince anyone to have kids if they didn’t want ’em! By a similar token, I still don’t think having kids or not is a valid retirement strategy. To me that’s a bit like advocating “Save money on pedicures by cutting off your arms” or “Keep your invalid mom in the bathtub to save money on nursing homes and seniors diapers.” The decision to have kids is not a money decision, it is a life decision. You decided not to have kids BEFORE you decided to retire early, so I think you made the right decision.

    Although I know you are right, that poor children and poor people are a “burden” to others, it saddens me that we do view them as a burden. Thinking to my mother for example, if she had to be taken care of as she gets older, I hope that I don’t view her as a burden at that time. From there, I would feel guilty thinking of others as burdens not worthy of living just because they’re not related to me. I do 100% support that each should contribute to their ability and not take advantage of the system though. Lazy people are a real burden. Unlucky people aren’t. Very hard to tell the two apart though.

  11. While deciding to to without cable has many advantages in addition to the obvious cost savings, I don’t feel that the story of your child’s reaction to television advertising (I want this, I want that…) was the best example to use. Children exposed to more advertising, and with parents who know what they are watching can learn to differentiate wants from needs and learn how advertisers make things more appealing to make money. My sons had a newspaper route and were exposed to dozens of advertising flyers every week. They quickly learned never to pay full price for anything (give it a week or two and practically everything will be on sale somewhere). They also learned that there’s a lot of stuff people are trying to sell that we don’t need, that “buy one, get one half off” is really only 25% off which isn’t much of discount in our eyes, and how to interpret the language advertisers use. They don’t want to buy much with their earnings, but when there is something they want, they are much more savvy about where to get it for the best price.

  12. @Perfect Dad, I don’t agree with your two comparison examples. In your examples, someone is being harmed by your proposals. However, nobody was ever harmed by remaining childfree.

    There is a big difference between being or creating a burden versus being unlucky. Unless you caused the disability or illness of your mom, she was unlucky. But having a kid when you can’t provide for it is stupidly creating a burden to society and one which could have been easily avoided. “Lazy and stupid people are a burden.”

    My early retirement advice is directed mostly at those who are on the fence, or undecided, about having kids. I want them to know that is a huge upside to remaining childfree, and that is a better chance of retiring early.

  13. @deegee: I think we just evaluate children differently — obviously 🙂 I don’t think of children as being a burden first. So when a child is created, I’m thinking: Another wonderful human being. I also think that being able to have kids is something basic and life-fulfilling for at least some people. Therefore I hesitate to demand that the poor should not have kids. I definitely do see the other side and wonder what the plan is for some people and their kids. Especially if they obviously don’t even care for them.

  14. Barb, I appreciate you pointing that out. There’s a lot of wisdom in teaching our children to differentiate wants from needs and to be savvy consumers. It sounds like you’ve done very well. At the age my children are, however, it seems to be early days still. Ideally, I want my children to become healthy adults who can choose to have or not have cable, despite the effects of advertising.

  15. In a perfect world, my ER “portfolio” will generate 60-70k per year… yet there are sure to be years where the nest egg will perform badly. During those periods, to avoid excessive draw down of my investments, I want the ability to go “nuclear” in terms of my monthly expenses. I think I could conceivably live on 15k per year – perhaps even less. Part of me would relish that challenge… yet no way would I, nor could I, even attempt this with children.

  16. @jon_snow – I don’t see how such a nest egg scenario would be any different from a pre-retirement period of extended unemployment, so what exactly would you be saving the children from?

  17. Let’s not forget that many of the things you mention (public library, playgrounds, quality public schools) are not free – they are paid for with taxes. I say this not as a criticism of taxes: quite the opposite! Sometimes it’s easy to complain about the tax bill without thinking of what we get for it. Ditto for health care here in Canada – my partner just moved to the states for work and has to pay $20 out of pocket every time he goes to the doctor, even though he’s fully insured.

  18. My husband retired several years ago at 52 and I am retiring in two months at age 54. We do not have children and we doubt that retiring this early would have been possible if we had. My husband has not worked a single day since retiring and has been an extremely happy retiree. After I retire we are moving across the street from my sister and niece who is 10. We are excited about having a child in our lives more frequently.

  19. Hanah, you’re exactly right. I am very grateful for the city, province and country I live in, where we are lucky to have such great public services. It’s still painful to pay taxes, but at least we get something for what we pay.

    Kaye, it sounds like you’ve found an ideal solution for you. And I bet your sister and niece will appreciate having you around, too.

  20. A hundred years ago and earlier, people had children AS their retirement plan. When parents were too old or unhealthy to work, children would care for them. The more children, the more likely the parents would be cared for, especially given the high incidence of infant mortality. The move from an agrarian lifestyle to an urban lifestyle has brought with it a change from retirement thanks to children to a retirement despite children. The “sandwich generation” are the people who will be caring for elderly parents and young-adult children at the same time. That won’t be a problem for those of you who chose not to have children.

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