Childfree Wealth Financial Planning with Jay Zigmont

Welcome to the episode. I'm excited to interview Jay Zigmont today. Welcome to the podcast, Jay. Thanks for having me. Tell us a little bit about yourself and what sparks your passion. I'm a certified financial planner. I'm also the founder and CEO of Child Free Wealth. What I do is I spend my time thinking about how finances in life and your estate plans are different. If you never have kids and come to find out about 25 percent of us are child free or permanently childless. Yet most nearly all the financial advice out there assumes you do or will have kids. So it's that interesting intersection of an area that has not been talked about. But a really big group that needs help. Yeah, that's interesting. When you sent me that statistics, I was like, wow, that is a lot. So how does being child free impact life and finances? The way we say it is living a life of child free wealth means you have time, money, and freedom to do what you enjoy. It doesn't automatically make you rich. So there's no magic check that comes through the air when you're child free. Like people are like, you don't have kids so you have to have a lot of money. No, like, there's still people struggling who are child free. But, it often means, You get more choices. Where my wife got offered a job 1200 miles away. We packed up the dogs and the cat and left. I mean, it was not a big deal. Although I do have to say you have to see two mastiffs in the back of a Prius. That was rather entertaining, but like we could just go. And what happens is when you have that much freedom, you can get a little analysis paralysis or paradox choice. You're kind of like, Too many choices. But the other challenge is you're not following the standard life script. The standard life script is you go to school, you get married, you have kids, you pass it on to the next generation. Well when you're not following the standard script, things feel like they don't fit you. You know, even something like buying a house is not a great idea for most child free people because they move all the time. There's just different assumptions that happen there. So we end up saying to our child free clients is you plan for your life first, then your finances, then your taxes, which is completely different than, Hey, I just saved for retirement. When I'm ready, I can retire. Yeah, so what advice would you give to individuals who are child free and wanting to create a fulfilling and secure future? So the first question we really get into is kind of, what do you want your impact to be? You get to kind of that forties ish age, a lot of child free people hit what we call the child free midlife crisis. This is when you hit your personal and professional financial goals, and then you're like, What do I do next? What's the next 40 years of my life look like? What do I want to do? And what happens is for parents, often their goals will shift to their kids. You know, whether that's right or wrong, that's a different discussion. But I want to make sure Johnny goes to college or, you know, grandkids or whatever else it is. But with child free folks, it's a question of what type of life you want to live. For most child free people, they don't have a priority of passing on money to the next generation. If that's the case, you're essentially trying to die with zero. That changes all the financial planning. Additionally, most of the people I've worked with don't truly want to retire. You know, rather than following fire finance events, retire early, I follow what we call file finance events live early. And it's really about shifting the work you do cutting back. You know, it's like kind of a dimmer switch for work rather than an on off switch, but I have clients who are like therapists and like, Oh, I'm going to go home meeting with clients. You know, but I'll probably always do some work and that even there's those two basic changes, changes all the assumptions in your financial plan and it challenges a lot of the, standard rules, like the 4 percent withdrawal rate, that doesn't fit child free people because the assumptions are different. Yeah. That makes sense. So how does somebody child free, like they're living for now, but How do they plan for the final? What is it that they need to have in place different than those of us who do have somebody to pass to? so the question we usually get as child free people is, well, who's going to take care of you when you're older? And I kind of have a love hate thing with this question. What I hate about it is that makes an assumption that your kids are going to take care of you and if you actually look at the data, the data does not back that up. So the U. S. Census looked at adults over 55. They found that for childless adults, 2. 5 percent got any financial support from their family. But they looked at adults over 55 and 1. 5 percent of adults got any support from their family. So this assumption that like kids are going to take care of me when I'm older. The data says no. The difference is we know it so What we try to do with our clients, our goal is by about mid forties to have a plan for long term care. That's either, long term care insurance, money set aside, or whatever type of plan works for you. And we are doing that because long term care is stupidly expensive. It's 115, 000 a year for a nursing home. Men spend 2. 2 years in it, women, 3. 7, huge, huge numbers. And those costs are rising by 5 percent a year. And we've tried to have a solution by mid forties because that's actually when insurance long term care insurance is most affordable. Now I say affordable. That's kind of not really the truth. It's when the price is reasonable versus really expensive. We make that part of the plan. The financial part is actually probably the easier part. The harder part is who's going to make decisions for us. So the way I look at this is for my wife and I, if we get a car crash, who makes our medical decisions? Who makes our financial decisions and who lets our dog out, which sounds like a silly consideration, but my wife's going to be more concerned about the dog than she is me. I mean, I say that tongue in cheek, but probably that actually is true. But like, who does that when you don't have next to kid? Cause all of the systems are based on next to kin. And when you take an account that 32 percent of childless folks will never marry, we're talking a lot of what we call soloists. It's a big issue and it's one that I've been working on for about three years and we hope to have a product out middle of next year to do this, where we'll actually be able to serve as child free people's medical power, train, fetch, proprietary executor, because right now, the answer is in California, Arizona, you can appoint a professional fiduciary. In other states, there's not really a great choice, except the government making decisions for it. And I don't care whether you like the government or not. I just don't want them making decisions for it. And that's where kind of start shifting this thoughts about like, well, how do I make sure like I'm taken care of? And all my needs are met. The money stuff of it is actually the easier part. So how does somebody, especially child free. They probably have siblings or something like that. They could, you know, revert to or whatever, but stepping into that role and being prepared, how do the child free. Single or couple, plan and think ahead about who to put in that role and how quickly. Long term care, the reason why I picked 45 is because of a lot of things we just talked about, you know, like, it's easier, but the other part of it is, your long term care quote is based on your parents health. So if you're 45, your parents tend not to have dementia, Alzheimer's diagnosis already, if they have that diagnosis, you might not even be able to get coverage. So just food for thought now when it comes to kind of like how do we point? So here's some numbers for you in the U. S. About 58 percent of the U. S. Do not have a estate plan. So the estate plan is the will medical power train plans. Power charity trust to be needed, and that's an issue. Because what happens is as a child free person, if you don't have the paperwork in place, they're kind of lost. In theory, some states will find your parents to make decisions. But let's be real, that's going the wrong direction. You know, the likelihood your parents are gonna be there for you to make the decisions are very low. So you have to have it. So what I do with my clients is even in their twenties, we will get that paperwork in place where it will lay out. What are their wishes, medical, financial will, and who's responsible for the issue of who's responsible is a big one because it turns out in the US about 25 percent of people are disenfranchised from the family. So that's actually, I don't know if that's a higher or lower number than I expect, but like when I first found out, I'm like, Yeah, sounds right ish, but then if you look at, like, a lot of the child free community are LGBTQ well, that community is a much higher percentage disenfranchised from their family. The other stat is about 20 percent of people in the U. S., even if they're not disenfranchised, don't live anywhere near their family. So, like, you're talking huge, huge numbers that don't have somebody to do it. And I've been working on this for three years to try to find solutions and really could not find anything. You can often get an attorney to serve as your financial power attorney or executor. They won't touch the medical bar. And the other problem is child free people move all the time. The editor for my new book her and her dog lived in a different Airbnb each month across the country. Where are you today? Josh, where are you tomorrow? Well, well, how do you manage your care? When you're all over the place, because each state makes its own rules. around who can be your private attorney and how that works. What we ended up deciding is we partnered with a trust company and we're going to serve as child free people's executive power attorney because there was not another solution. I would love to have one. And I was doing a podcast recently. So we said, shouldn't they change the laws to find a way to help people do this? And the answer is great, but it hasn't changed. You know, some child free people are like, they're going to do what we call like the golden girl set up a whole bunch of friends together. Well, That's great because you can provide support to each other, but the last friend in the group is not on. At some point this isn't going to work. Ian, it's a huge burden. Let's just be real on that. You know, I had somebody He has kids, but he explained to me this way. He said, he wakes up every morning thinking I killed my mother. I was like, Whoa, what do you mean? And he said, look, I knew all of her paperwork. She didn't want to be on the machines. I had to tell her to pull the plug. I still wake up every morning thinking about that. We don't really talk about this stuff because it's, it's bad. And I think part of the reason why 58 percent of the U S doesn't have estate planning is, you know, I'm an answer. Like, what do you want me to put down? I have nothing. And we need as a society to figure out better ways for people to do this. What I tell my clients, so we have a program we call the eight no baby steps and that's the financial plan we have for child care people. And step seven is what is your plan for your parents, you know, it's not your kids, your parents like what is their paperwork say what do they want and all that. I really use as an opportunity to then walk through go. Well, what do you want. I had somebody explained to me this way, he said his mom was 90 something in a nursing home. And she loves chips, but the nurses said, you can't have your chips because, you know, your sodium or your diet or whatever. And he went to the nurse like, just give her the damn chips. Like, what's it going to do to her? And his question was, who makes sure I get my chips? And like, that's actually a harder question than like, you know, the doctors will make the decision. You've got to pull the plug or something like that. But like, how do you make sure you are dying with dignity? You have what you want. You know, and there's not a great answer. And what happens for child free people, if you don't have a will, if they can't find next of kin, the government will take all your stuff, which I don't think anybody wants, you know, so it's. It's one of those areas that like, I think as a society, we have not talked about enough because it's just scary. Nobody wants to talk about it, you know, if you don't plan ahead, it's a nightmare. At least your parents have planned ahead. You know, I, I've worked as a paramedic early in my career, and I remember this time I went to this patient's bedside. He was in cardiac arrest, eight family members around the bed. Half of them are saying he wanted to. Go peacefully. And the other half are saying, no, do the code, we're the patient. I looked at him and said, do you have any paperwork? He's like, no. I'm like, okay, but I'm going to do what I have to do. I'm going to do the CPR, all the other stuff until you find the paperwork. Can you imagine your family members around the bed? I mean, the guy actually was dying of cancer. He goes, Oh, sorry, man. But like fighting over whether or not what the paramedics should do. The answer is paperwork. Like, I understand some people weren't checking it, but in that case, like, yeah, I need something in writing before I can just be like, okay, I trusted half the room. Yeah. And, you know, I tell people, because I've had estate planners on before as well, I'm like, you have got to talk about this section of life. You've got to be prepared. It's still, it's, death is hard. Losing parents is hard. Losing siblings, you know, same. You've got to be prepared. If you know their wishes, that at least makes it easier on a subject that is much more difficult. But I also had a thought, you, you know, with those that are child free in their 20s, they're going to think differently about death than those individuals in their 50s and those individuals in their 70s. I think, you know, at 20s, you're invincible. You're never going to die. And yep, do any life saving measure, you know, unless you're that rare one. And it's like, okay, so what do you do? And I think that's really a hard. step for anybody is like, what do I really want? And I think you get to a certain age and you're like, it doesn't matter. I just, if when it's time, it's my time, but you've got to express that to the people that are needed. So yeah, I'm going to challenge you here. So the 20 somethings that I've dealt with have had an answer, what they want and actually a rather informed one. And I say that because, you know, there's a lot of politics right now. And, you know Things around health and medicine and all that. But what happens is they're like, Hey, this is what I want. And this is what I don't. And I even had somebody she's in her twenties. She went out and researched and actually went to facility, did a tour of a place that compost your body. Like it was part of this nature thing and all that. I don't, I know 20, I wasn't doing that. Yeah, this generation is like, like, literally, she's telling me about like their composting process for by that I had no clue about. So I think it's just what I'm seeing is the younger generation. So we talked Gen Y and Gen Z are very thoughtful, and they're pausing before they do this. And that's part of the reason why we're seeing those younger generations with a higher percentage of child for people. If you look at the numbers, an adult under 49, Great. If they don't have kids, 47 percent say they never will. So it's a huge percentage. If you look at Gen Y and Z, it's going through the roof. And somebody will argue with me, well, hey, you know, they don't know what they want. Well, I'm talking about people that are getting sterilized at 21. So like, this is not changing their mind. But if you actually ask them, why are they not having kids? They have a wide variety of reasons. You know, some just didn't want to have kids, some it's finances, some it's the environment, some it's politics, like, some it's medical issues. Like, really well thought out reasons. And then some, can't. You know, that happened to be the case for me and my wife. But like, the reality check is, the younger generations are stopping to think about a lot of things that you and I didn't when we were their age. I just, I was dumb at 21. Like, I'm just gonna say it. Yeah. Yeah. I mean, it's like they have so much more, I think, exposure, and I'm just going to use that term loosely, that I do think that they are being fed a lot more information. And hopefully, like that gal you just mentioned, they are doing the research because there's a point in seeing the information and there's another step of actually researching it and consuming it for yourself. So, all right. So let's talk. Gen Xers. Child free, they were like us at 20 and not thinking, you know, we were invincible, all of that, that's pretty much our generation, we were diehards, but if they find themselves now, so roughly Gen X is mid 40s to, you know, 60, I believe, had just turned this year, what do they do at this point? They're child free, maybe they've never thought about financial planning, medical planning, all of these things, where should they start? Yeah, so I'm a Gen Xer and the interesting thing about Gen X is you have to keep in mind is of course we have that independent latchkey thing going on, you know, that's just kind of the way we're raised, but it's the first generation that's going to retire without pensions. And when I say that, like there's a small amount of like government pensions, like firefighters and things like that, but like they're so small, like they're a small handful. And what I'm seeing is we get a lot of these folks in and they're in that midlife crisis thing. They're like, What do I do with the second half of my life? Because they've just done what they were supposed to do. You go to school, you work hard, you go up the ladder. We have a podcast, a child for a podcast. And one of our top download episodes is I'll make you quit your job. Cause I have so many people like they're miserable at their job. And I'm like, well, how about we change? And they're like, well, but I went to school to be a, and I went up the ladder and I'm like, listen, the 18 year old version of you picked the school and then you went to the career on the 18 year old version of you was dumb. Why are you still following their? And I see a lot of Gen Xers going, I want to do an encore career where they're like, I want to do something different with my life. I got people starting business. I got somebody doing pottery. I got somebody like writing books, whatever it is. But what I'm trying to do is get them to stop and go, what life do you want to live first? So often the first question I'll get from them is when can I retire? I go, okay, do you want to retire? They go, no. Then why are you asking me when you can retire? You're like, well, that's what I'm supposed to do. And there's like this trap of what I'm supposed to do versus what you really need to do for your own personal planning. The way I say the child free people is if you go to get financial planning, I want you to ask how your plan is different because you're child free. You're going to get a couple different answers. Actually most common is. You'll change your mind, which is just not appropriate. Like, I mean, like, that's, there's a lot of judgment there. Second on here is, it's not different. That's not true either. Often planners will say, Hey, I don't know. And I'm actually okay with that answer. Like let's figure it out together. But it is a different way of thinking. You know, so like great example is like life insurance for child free people, not a big need. If you're single and child free, there's probably no need for it. And these are the things that just people don't think. And what happens is when I engage with child free people on their financial plan. We'll go through all their numbers, we'll get things cleaned up, their accounts all replaced. Gen Xers have like, 641k accounts at all different companies they've worked for, you know, like, we'll clean that all up, and then we'll go through the numbers, and I'm like, you're okay, because they were doing good saving, they were doing a good thing. What do you want to do next? And they're like, I don't know. And I'm like, what do you want to be when you grow up? I don't know. It gets to the point where I'll say to my clients, okay, let's do it this way. What is the second line of your obituary? So the first line says, Jay died at this age, this location. The second line is usually father of three leaves behind for child, the free people. What is it? What is your impact? What do you care about? What do you want to do? And it's interesting because most of my clients say like, well, nobody's ever asked me these questions. And I'm like, well, if you don't have the answer, you can make a financial plan that gets your numbers to go up, but that might not be your goal. Like you might be making the wrong choices. For you. And that's hard for people, like, I spend more time with my clients talking about spending money than saving money. Like, it just messes with their head. Yeah. Yeah. So interesting. Some great points, great tips, a lot of aha moments I've had, I hope listeners have had. So how can they connect with you? How can they learn more about child free planning? So we're at ChildFreeWealth. com, all the socials, Child Free Wealth, and just put out a new book, The Child Free Guide to Life and Money, available in bookstores everywhere. Great. And all of those links will be down in the show notes. So, Jay, thank you for your advice, your wisdom, and your expertise, and we will have listeners next week.