Childfree People Get The Wrong Financial Advice

January 21, 2025 DINARRECAPS8

Childfree People Get The Wrong Financial Advice — and they’ll be paying for it in their old age

Alessandra Malito Sat, January 18, 2025 MarketWatch

People who don’t have children aren’t getting the best financial advice, one author says.

There are more than a dozen differences in financial and estate planning for people with children and those without — but the financial-planning industry doesn’t address them separately, according to Jay Zigmont, founder of Childfree Wealth, a life- and financial-planning firm dedicated to helping childfree individuals. Zigmont, who himself doesn’t have children, is also the author of a new book, “The Childfree Guide to Life and Money.”

“There are assumptions and things built into the system that means, ultimately, childfree people are getting bad advice, or at least advice in the wrong direction,” he said.

Part of the problem could lie in how advisers make money. Individuals who don’t have children might want to spend all of their money while they’re living, while those with children could have bigger goals of leaving behind an inheritance.

This clashes with one of the most common ways advisers make money in the financial-planning industry: the assets-under-management model. With AUM, an adviser’s compensation is a percentage of what the adviser is managing — so when the money in the account dwindles, so does the fee.

“How does that compare when someone is trying to die with zero?” Zigmont said. “There’s a conflict of interest.”

The right financial planner for a childfree individual or couple will acknowledge the nuances, Zigmont said. “Your planner needs to understand how things are different for you, and that’s a challenge to get good advice,” he said.

Beyond the importance of money management is estate planning, which needs to be tended to immediately for childfree folks.

Zigmont spoke with MarketWatch about some of the most important aspects of planning for the childfree life, and how it differs from financial planning for people with children. This interview was edited for clarity and length.