Having a child and saving for retirement. Advice from parents & non parents alike?

enthusiasticsaver

We had 2 children very close together but when we were younger than you, aged 26 and 27. We knew we wanted children, we were both earning roughly the same at just average earnings and owned a small two bed terrace property in Greater London in the 80s with a mortgage. We both had occupational pensions but no real savings.

Our thoughts for having children realatively young by today's standards (not that young then though) was we would have time to sort out retirement provision once they were grown up and hopefully mortgage paid off. We followed our life plan almost exactly and husband is now retired at 58 on 2/3 of his salary and I retire the end of this year on about 50% of mine. We have a large savings buffer, no debt or mortgage and both children are now financially independent and one is married with a child of her own and they both own property.

I think it is possible to do both but decisions need to be made along the way. If you want children and are mid 30s I personally wouldn't wait any longer not just because biology dictates for your wife she will fall pregnant easier if she is younger but also because approaching retirement with little savings or pension provision and children who are still financially dependent is a perfect storm. Having only one will make it easier and making pension payments as much a priority as mortgage and utility bills is important. Whatever your friends say we have only been able to retire 8 years early because we prioritised pension payments sometimes at the expense of other stuff. We would holiday cheaply one year and go for something more expensive every other year. My husband had a company car but until recently I always made do with cheaper used cars and we always budgeted well and had no debt. Entertainment costs were kept low - DVD at home with bottle of wine weekly except for special occasions and I never splurged on makeup, clothes etc. It can be done

enthusiasticsaver

One thing I would say is the quality of retirement is not just determined by money. Adequate finances for your lifestyle but other things to consider are your health and your family, neither of which are affected by finances. Our children and granddaughter are a source of joy I would not exchange for a few extra thousand on our pensions. There are always trade offs in life, a bigger house or a better car, a foreign holiday or university fees for your kids. We all make choices but I would find it very hard to sacrifice having children for a better pension. We have enough now but if need be we would have worked longer if not.

PuzzledDave

I admit I have not read the whole thread, but here is my size 12 boots anyway.

In terms of child costs, try to keep this in mind:




For a good and early retirement, I'll echo others on here: concentrate more on your spending and less on your income. Try not to compare your life to the others you mentioned who seemed comfortable, you can have little idea how rich or debt laden they really are.

My personal best money saving tip is to throw the TV out. We chucked ours out about 10 years ago before the kids came along and they have no desire at all for the latest toy or trip to expensive land. They honestly love to play with my ancient toy soliders and lego and the wifes old childhood toys. So do the kids friends when they visit.

Before the big holiday, new fancy phone, new car - ask yourself honestly: Is this really worth making myself poorer when I am old ?

When you are able to cut back on luxury goods/clothes/electronics/meals out to fancy places - your pension savings are easy and grow fantastically fast. Do this and in 10-15 years you will see days when your pension earns more money than you do.

RickyB2000

Not_Me_Officer wrote: »

Abbreviations can be great ... when you know what they mean I generally stick to the standard ones like lol I jump on forums and i'm stumped by so many of them

Achievement, worth, purpose, happiness (& frustration! lol), please don't analyse the words i selected. They were just the ones that came into my head first. I don't want to read any "well [word] should've been your first response" type of over analysing looking for something that isn't there Not saying you would but some do.

I remember as a kid often thinking about death. I remember regularly being in tears as a very small child wondering what would happen if my parents died while i was a kid. As i got older i still thought of and worried about it a lot. Then i finally lost my dad.
As i get older still i do still think about it probably too much but the focus has now shifted to myself after seeing my dad in the build up to him dying. Will i have anyone? Will my wife be around? How will she be after i'm gone (we generally assume i'll go first but anything can happen)? How will i be once she has gone? Will i be happy with what i did in life (right now i would probably say no)? Who do i leave my small worth to? What if i get dementia like some family members - who will be there for me, anyone, nobody? If i need care, what level will i get? I recently had a family member receive very poor care to the point where it was very dangerous. It was only the fact they had their kids who were out constantly checking in and looking out for them that got it sorted otherwise who knows what would've happened.

Yeah i think about death quite a bit actually. Probably too much.

I don't want to upset anyone here so i'll just say adoption is not for me, and yes i've spoken with my wife about this.

ROI - return of investment. Often used in business cases.to justify spending X amount of money on something. So in this case you estimate how much they will cost (plus the opportunity cost of not spending that money elsewhere) and offset by what you gain (e.g using Jamesd's plan to claim WTC etc). Plus the emotional side of things.

You could also take the Family Guy approach:

- have as many kids as you can, 'cuz that makes it more likely that one of those kids'll grow up an make it big in Hollywood. Then who's payin' the bills huh? Hollywood Kid.

No, no over analyzing. Just making you think about why you really want them. It is a big scary decision money or not - as your life is no longer your own. Maybe you are just afraid of the unknown and finding excuses to prevent doing what deep down you want to do? I do this sort of thing all the time - look at all the things that could go wrong and paralyze myself from doing something I really do want to do or something that everyone else would just jump in and get on with. It is hard being an over-analyzer!

Death - as I get older I dwell on it more and more. No guarantee having kids will help - they may decide they just want their inheritance and bung you in an awful home (though that may reflect more on your parenting style if they do). But do it right, and hopefully you will get that fulfillment you don't yet have.

xylophone

Having a child is giving a hostage to fortune.

Fortune may bring joy or sorrow, riches or poverty.

It is simply impossible to tell.

One other point, having a child is not wholly within your choice or control - nature can be cruel.

You sow a seed and wait...... sometimes the harvest fails....sometimes it's poor, sometimes it's abundant.

Over to you.