Having a child and saving for retirement. Advice from parents & non parents alike?
Comments
-
Dear HMO. I do not think you approach the issue from a correct angle ; moreover , I do not think you should think of it at all now. Plenty of people live on state pensions. You will have more because whether you have children or not you are and will be saving for retirement , question is just in number of how much more. So you are not going to be hungry. You would not ask whether you should eat or save for retirement as not eating is not an option. It is the same with children for many people who you somewhat judgementally implied do not think. As previous poster written , "it was in her DNA". So implying or saying they are wrong is wrong. Another analogy - you would not have sold your kidney and your arm and lived without them to fund retirement, would you ? You would find the suggestion sick and an aberration. So would many people find your suggestion of it being an option to not have children due to impact on retirement planning.
People have reasons for not having children which I understand but negative impact on retirement which you have not even calculated on not one of valid ones methinks. The fact that you are having discussions about children (while you do not have desire to have any at present) tells me your wife wants them. This wish is going to get stronger with time , it just started , you just done a nest. If I am right not having children is not going to be an option because it will be a necessity for your wife. She probably does not say so now because it just started or because she tries to persuade you gently. She may not leave you if you say "no" to children but her life could have had a major unhappiness in it - one more spoon of jam daily in retirement is not worth living life in emptiness.
Now , going to your question- what is your Number and how you planning to achieve it ? How much do you spend now apart from mortgage and savings? Cost of a child upbringing - up to you to a large extent. I would say 6k yearly. (Deduct child benefit - 5k). May be you will have some other benefits - check them. That is without loss of earnings. This part you can calculate depending on how long your wife would stay home , what her maternity pay would be , what her part time ( as I assume she would go part time) income would be and how much childcare would cost or may be between her working part time and extended family you would not need any ?The word "dilemma" comes from Greek where "di" means two and "lemma" means premise. Refers usually to difficult choice between two undesirable options.
Often people seem to use this word mistakenly where "quandary" would fit better.0 -
I would say, with your income, you are, like us, looking at a small family. IMO a moderate income doesn't equate to hordes of kids, and in any case (again IMO) I do not believe that in this day and age we have a right to increase the global population at will.
I suspect we have had a similar average income level to what you are likely to expect over your working lives.
We both intend to work a little beyond our current SPA's (so probably to around 68), although we could go next year when OH reaches his - we run a small company nowadays so have a choice here.
Our parents both struggled, and although our income was never generous, we were always better off than they had been.
It is easier IMO to cope when children are small, as they are perfectly happy as babies / toddlers with hand-me-downs and (safe) 2nd hand equipment. Costs really begin to mount as they get older and demand "everyone else has...". You and your wife need to support each other absolutely on what they can / can't have, maybe having a list from which things can be "called down" for birthday etc gifts.
However, we found you can still save, prioritising pension just a bit more than other things.
Many of our friends seemed to regularly change their furniture, kitchens, bathrooms, carpets. We didn't. Things were as far as possible kept until they wore out.
We had less expensive holidays - off season when children were below school age. Self-catering / camping / UK when older.
The children were both given a small amount of pocket money "as of right" (very small!) but could earn extra for good school results and doing small jobs around the house, and we helped them get weekend jobs when they were old enough, and charged a small amount of what they earned as "rent" - they got it back as a lump when they left school.
We have a number of smaller pensions + SP for when we do finish work, and expect these to bring in around £30k total by then, which will be plenty, as there will be no mortgage to pay.
Yes things have been hard at times. But even with no kids you may well go through that if one of you became seriously ill, or became redundant unexpectedly, and those can hit you without giving time for any planning.
If you would be resilient enough to cope with those sort of emergencies, then, if you actually want children, you should be able to cope there too.0 -
I think you are very wise to think about it and ask these questions. The main reason I say that is because you are both older. The "just do it" approach tends to apply when you are younger (in your 20s) when you can take so much in your stride. You are both in your mid 30s so having a child has more risk and you will be older parents so it can be hard. We had our only child when we were both 38 and it was hard going at times.
Having a child can be expensive. It is the things like school trips, hobbies, sports and stuff that mounts up and is hard to budget for. For example, our son got into hockey and played in goal. I had no idea how expensive hockey goalkeeping gear is! Now you could say either "don't play that game" or "use the nondescript kit the school/hockey club has" but that would have prevented him from doing something he really enjoyed and actually got very good at. Plus of course there's the endless ferrying around to matches and training sessions.
So I think you will find as your child gets older the costs will mount up so it's likely you won't be able to save as much. This may push out your retirement date so you do need at least to think about that. Ultimately though it may be down to your wife like Justme111 says. I never wanted children and my wife always said she did not either but in our late 30s her attitude changed and I wasn't given much choice in the matter! I don't regret it btw but I do wish I had planned better for retirement earlier in life.
The other big choice is how many children do you have. The more you have, the more the costs will go up. OK there are some "economies of scale" as the economists say but 2 is going to be more expensive than 1. We started late so decided to stick with just one child and we are glad we did. Partly that was to keep the financial burden down and offer our son more choices but mainly it was because we both found the early years very hard going and neither of us wanted to go through that again.
No easy answers but it is a really good idea to do some planning and anticipate what the impacts will be.0 -
Spreadsheetman wrote: »Well, it's a simple question they need to ask themselves - are they 100% sure that they can remain employed until they receive their state pension at 67-70 and then live off £160/week for the rest of their life after that?
I agree. Especially with the "ask themselves" part. As in, they need to ask the question, not you. Never try to help someone with their finances unless it is someone you care about or they ask for it. Unless you want to make yourself het up over this kind of response, or you want to swank about how much more responsible you are than them. Nobody in the history of finance has ever responded to this conversation by saying "wow, you're right, I do actually need to save for retirement, I'll start right now", they just dig their heels in. They only start saving for retirement when they have a lightbulb moment in the middle of the night, and they won't thank you for it.
If someone has 9 kids they're probably happy to live frugally and whatever they have when they retire will feel like a king's ransom when they've not got 9 kids to spend it on, even if it's just State Pension. There is probably an element of "the kids are my pension plan" as well. And if they they own their own house they're almost certainly going to realise significant capital when they move to a smaller one. Downsizing is widely overrated but while the average person with 2.2 kids usually has much less scope for it than they think, that doesn't apply to someone with 9.0 -
I think you are doing the right thing and thinking about this.
But while you are thinking, bank your wife's entire salary and live on yours. In cash savings (if you dont have 3-6 months expenses saved) and then into S&S isas.
This will mean not only can she take 18 months off (if you take into account maternity pay) with no drop in income, you will see if you can afford to live on your salary alone.
Kids are expensive. I had 3, 2 of which were twins. Which meant i had to buy ANOTHER of everything incl cot, pram, basket car seat etc, and a sofabed (as had to gt rid of double bed in spare bedroom for their 2x cots). My annual nappy bill alone was ridiculously huge. So when I was 7 months, I started bulk buying them in different sizes on sale bogof or 2 4 1. And stacked them in the corner of their room (up to the ceiling lol).
But it can be doable if you save and plan. So get saving and planning.
And agreeing about doing it, how you will do it etc.0 -
Not_Me_Officer wrote: »Oh and some of these people have plenty of kids. The most is 9. There's a 7 & some 5s in there and then on to the usual 3s, 2s & some 1s.
Many have a household income similar to mine, some more and some less but many similar.
And they can all afford which as I say makes me sure I will be able to afford ... in the present.
It's just afterwards I question.
Depends what you mean by "afford".
You can afford kids on the dole, plenty do. Thing is, do you want to?
Do you want to afford them when just getting by?
The answer to those could be yes or no, thats a matter only you can say.
You focus on retirement but seems to me if you did have kids the next ten years would also be like living on retirement wages also. As I said, try living on your wage for the next year and see what thats like.0 -
Some things in life you purchase when (and ideally only when) you can afford them.
Some / most decisions can be amended. If you have overstretched yourself on buying an asset (car / house) then you can sell that asset, albeit often suffering transaction costs & losses, and mitigate any future financial stress.
However children most spectacularly do not fall into that camp.
They are one of the very few "we will have it and somehow make it work" type decisions. A bit like marriage (and possibly pet ownership).
Frankly, if you tried to make a rational business case for having a child, then noone would ever have one.
Think "spectacular cost". Double it. Again. And Again. just when you think you have possibly nailed or worked out the costs, something will come along to blindside you.
I think we are given temporary custody of children as a wry exercise in humility - both in puncturing the pompous illusion that we are grown up and mature, know what we are doing, can work out tricky stuff (so then how hard can it be to work out how to bring up a baby - easy! People have been doing it for thousands of years!), and in the futility of financial (and other) planning.
Life becomes a whirlwind.
No peace.
Little sleep.
General confusion.
Panic at the responsibility.
Always Being Wrong. About Everything.
No money.
Need a bigger car.
Ditto house.
Stuff breaks. Constantly. Especially the expensive stuff you might have once cherished (camera, stereo, TV, house).
Carnage in 5 seconds when you turn your back.
Unbelievable mountains of laundry.
Having A Social Life is only for the non-parents in the house.
Known only as "X's parent" - I have forgotten my own name.
Premature baldness, ageing.
Being entirely inured to bodily functions.
BUT
It's actually quite fun, if a little tiring sometimes. Really!
(I have 4, including 3 teens. It's never quiet. I earn a fortune and don't see a penny of it for myself. I wouldn't have it any other way)0 -
If someone said to me I could win £100 million on the lottery but not have my kids I would keep the kids. I suspect any parent would. It's not a financial decision but of course you will have to work out how to get by. Start with cutting back on non needed expenditure (take always, sandwiches for lunch, foreign hol) - analyse your expenditure now.0
-
I'm going to put this one in its own little quote.The fact that you are having discussions about children (while you do not have desire to have any at present) tells me your wife wants them. This wish is going to get stronger with time , it just started ,
Why? Because so far i'm getting the vibe that because i haven't created this thread saying ... hey help me i want kids no matter what, i'll do anything to make it happen, literally anything .... that it must auto-mean that i don't really want them.
Then we progress to talking about kidneys and the like and i'm thinking really? How far can we take this?
But the above quote is perfect for me. Can i just ask you if you don't mind .... what brought you to that conclusion? I sensed some real Sherlock Holmes work going on there so what brought you to declare that?
As for it being wrong that i am implying other people are wrong to not think about it. I personally believe that is a case of looking for something that isn't even there. I'm well aware that some people both online & offline take great exception to how much i think about things. That's their decision & thinking about things is mine. Likewise if someone doesn't think about retirement & just goes ahead having a child. It doesn't effect me so i'm not saying it's wrong. It's their decision not mine. I'm just saying that it's not the way i would do things. I think things through thoroughly. Always have done. I over analyse so i'm told very regularly. But that's me. People tell me like i'm wrong. Maybe they're wrong for implying i'm wrong? But anyway i never implied these people are wrong at all, i just said it wasn't my way. You were the one who basically said i was wrong.
What i will say is wrong is the relative i mentioned. Complaining non stop about no money, getting hand outs (no problem) but then their relatives who are doing the handing out - they start to complain about them being involved in the childs life. So basically what they want is for this 'bank' to just quietly hand money out but keep their mouth shut, stay in the background. That is what i think is wrong.
Just going out and having children with no thought for later life that's no more wrong than being a chocoholic or whatever. Please don't tell me what i mean, leave that to me
But still, tell me how you came to that conclusion about my wife if you don't mind?0 -
Yes but not necessarily would be my reply to that.AnotherJoe wrote: »if you need to even ask if you can afford it that still means (at least to me) that the burning desire isnt there. Otherwise you'd simply accept it meant a lower standard of living both now, and in a later retirement and get on with it anyway.
I agree - the burning desire (where nothing else matters in the world) is not there, but that also doesn't mean that we don't want one. it also doesn't mean that it'd be wrong to have one. Not everyone would make the decision to go ahead and deal with the low standard of living for the remainder of their lives. I'm sure there's enough people out there who do want children but just can't handle how much they would financially struggle.
I spoke with someone today who has a number of children. They're of a similar age. I asked them how they're set up for later life. When they stop working how are they putting aside to be comfortable to a level they'll be happy with.
Their response?
"F# that SH#! I don't worry about that. I'll deal with that when it comes".
And like i say, if these people and myself drop dead the day of retirement then not putting away worked out perfectly, right? But.........what if?
It also makes me wonder if this is a typical attitude of the working class. It seems to be of the people i know. Or is it only as you work higher up the food chain that their pay allows them to also put aside whereas people on a wage like our household are more limited and are therefore more likely to live for the present? I don't know i'm just rambling and guessing.
Are you a solicitor?I think given what else you say, it does.
If you really wanted them, you wouldn't ask, and even if you were just "very keen" (which doesn't come across from your post which is all i can go on) i think your question would have been, "how do i make it work", not "should i make it work".
As said, my head is all over at the moment with all these thoughts running through it and trying to work things out and you want to pull me up over how i've worded something?
And i'm the one over analysing?
That's better. Something i can work with. Ok obviously it's not great news for us but i'm asking the experts (those who've been there & done it) if it can be done on our situation really so thanks, i appreciate your view. Genuinely.and on your incomes i dont blame you, you will be able to get by but unless you can, say, double your income thats all it would be.
I think partly you are because it seems you're over analysing what i'm saying.Perhaps this is the test, if you push back against posts like mine and still go ahead, then you know you "really" want to. But i agree with your financial analysis, it would mean a poorer later retirement and to me that comes across as your reason why you would choose not to go ahead. Not me, you. Maybe I'm reading you wrong though?
There's things i didn't put in there. The sleepless nights, the troubles that develop as the child ages, so on and so forth because i believe we can handle these. Of all the 'worries' the only one i'm not really sure about is retirement which is why i'm here asking questions.
So just because it's my only question doesn't mean it's the 'main' priority in life. It just means it's the one i don't feel i've figured out yet.
Not a bad suggestion actually.Why not see just how much you can save for the next year or so, by only living on your income, no cheating, put 100% of your wifes income away, and see how that goes. If at the end of a year -18months, thats too hard / unacceptable for the next 10 or so years, and then in retirement, then you know the answer.
That said, we only have a 12 month window due to our age, but it's a good idea.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.2K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards