Financial Planning for Childfree Clients: A 60 Million Person Opportunity

About a quarter of American adults have chosen not to have kids. Add in those without children for reasons beyond their own decisions and you land somewhere near 60 million people—a population most financial advisors have never deliberately planned for.

Dr. Jay Zigmont, CFP®, has built his firm, Childfree Wealth, around exactly that group, and he argues that financial planning for childfree clients is different enough from the standard model to require its own approach. During a recent RightCapital webinar he shared that roughly 80% of the prospects who reach out to his firm have never worked with a financial planner.

Why childfree prospects aren't calling advisors

Jay’s team surveyed childfree people about their experience with financial planners. Many reported feeling like their lives had been brushed aside or that the plans they received described someone else.

Even worse, others reported being asked questions they found inappropriate such as “Do you hate kids?” or “Who will pay for Social Security?” or even being told, “You’ll change your mind.”

Jay's response to that last one is blunt. "Childfree people have probably put more thought into not having kids than most parents put into having them. That's not a judgment. That's just a reality check. When you're living a childfree life, you're going against the norm. Against what culture says, what religion says, what society says. So they often have it very well thought out." The data backs him up: among people who identify as childfree by choice, the percentage who later reverse course sits in the single digits.

From CFP® education to default assumptions built into some financial planning software, the industry tends to assume that clients either have kids or will have kids later on. Making space for childfree clients is the right thing to do, and it’s a real growth opportunity.

Planning considerations for childfree clients vs. a “nuclear family”

The opportunity isn't just an underserved audience. Many typical assumptions come loose here, such as marriage, heirs, and the accumulate-then-transfer process. The advisor who understands what replaces them has real expertise to sell.

The majority of these clients are legally single

Census data on adults over 55 found that about 32% of childfree adults had never married, against 2.5% of parents. Add in widowhood and divorce and Jay estimates the legally single share of the over-55 childfree population is near 60%.

Now go back through what you typically have in a plan. Unlimited marital gifting disappears. Spousal Social Security disappears. The person your client considers their partner may have no legal standing to make a medical call.

Being unmarried doesn’t necessarily mean living alone. Jay often sees long-term partners, poly households, and friend groups planning their lives together with none of the legal architecture that marriage brings.

Those who do live alone are often paying the “single tax,” an unofficial increase in certain costs that are otherwise split, such as rent or mortgage, a room on a cruise ship, or a Netflix account. Jay estimates the “single tax” can cost between $400,000 and $1 million over a lifetime.

Ending with nothing is often the goal

In Jay’s own survey work, 81% of childfree clients want to effectively “die with zero.” Many of them will still pass along money to friends and family, but as Jay puts it, “If my nephews end up with $10,000 or $100,000, great, but if they get $1 million, I’ve done something wrong.”

That one preference ripples through everything downstream. Step-up in basis stops helping. A 1031 exchange starts working against the client, because the whole point of deferring gain is to hand the asset off later.

It also puts pressure on the metric most advisors report on, the probability of success, as determined by Monte Carlo simulations. Jay emphasized that telling a childfree client they have a 100% chance of not running out of money is telling them they have a 100% chance of failing at what they asked for. He builds a safety net first (a funded long-term care plan, Social Security delayed to 70, a year or two of expenses invested), then solves toward 50% probability of success in Monte Carlo simulations.

The insurance conversation flips

Life insurance loses much of its purpose when nobody depends on your income and nothing needs to pass to the next generation. “If you’re single and childfree, and nobody’s relying on your income, I can pass up on life insurance,” Jay said. Two clients in his career have talked him into it, one with a charitable bequest and one with an inheritance that passed to one spouse only.

What moves up the priority list instead is disability insurance and long-term care insurance. In most cases, nobody is stepping in to cover lost income or provide unpaid care later in life.

Long-term care planning should be in place early

Jay once had a 29-year-old client ask him for a long-term care insurance quote. Most carriers won't write one before age 30. That sounds early until you remember what every childfree person hears at Thanksgiving, “Who's going to take care of you when you're old?”

His firm's standard is a long-term care plan by the mid-40s, whether that is Medicaid, long-term care insurance, or a specified amount set aside for future long-term care costs. The plan answers two things: how the care gets paid for and who has the authority to make decisions when the client can't.

Decisions on estates should not be left up to the courts

In a “nuclear family” plan, the estate would usually fall to the spouse and then the children. If there are assets left at the end of a plan for a childfree client, it’s important to designate the recipient(s), whether another family member or a charity.

The pushback Jay hears most often comes from those who figure the paperwork can wait. One tip Jay has for these situations is to start asking about pets, which the majority of childfree people have. If you end up in the hospital and the court has to appoint a guardian, that takes a week or two, which is too long to leave a pet alone. "It sounds weird," Jay said, "but the pet can often help."

Charity does the work inheritance usually does

A Yale University study found that people without children or grandchildren give roughly three times more money to charity than those with direct descendants. The pattern is even sharper in estate plans—one analysis found nonparents were five times more likely to include a charitable bequest.

Jay emphasizes giving while the client is alive instead of waiting until the end of plan. This allows the client to watch the money do something and stay involved in it.

The vehicles shift around depending on what the client is holding. Some strategies that may be worth exploring:

• Donor-advised funds for clients sitting on appreciated stock (ensure the chosen DAF matches the values and politics of your clients as some are limited in what organizations they can donate to)
• Charitable remainder unitrusts (CRUTs) when the appreciation is locked in real estate
• Qualified charitable distributions (QCDs) for the retirement-account problem
• Life insurance, if it shows up at all

FILE, not FIRE

The other place the plan diverges is on the income side. Childfree clients tend to chase something Jay calls FILE (Financial Independence, Live Early) rather than FIRE (Financial Independence, Retire Early). They would rather find work they enjoy now, even if it pays less, than grind toward an exit date.

Which means the advice could sound strange coming from a financial planner. "You would be amazed how many times we tell our clients to quit their job," Jay said. One of his paraplanners started keeping a tally. The conversation usually opens with some version of: I'm making 200 grand a year, but I'm miserable. And the answer is, well, then go quit your job.

Where do they go? Back to school to become a librarian or to run the bookstore with the winery in the back. "I don't know why it always has to do with books, it just tends to." Those jobs don't pay much but they generate a lot of joy, and make sense for a client whose stated goal is to end with nothing.

How to meet the needs of childfree clients

You don't need to relaunch your firm to serve the childfree market. Most of what Jay recommends happens at the front door.

Choose your words carefully

Instead of using the word childless, which could imply that this population is missing out on something, many in this community prefer the term childfree.

Set expectations during onboarding

Jay’s intake asks whether the client has children, then asks whether they want children. Two no's trigger a written promise that Jay’s team will never raise this topic again unless the clients bring it up. That promise does more for trust than anything that happens later in the plan.

Jay recommends skipping what may seem like a natural follow-up question, even if you’re curious: “Why are you childfree?” Whatever the reason, the planning work is the same, and skipping the question can help the client feel more comfortable from the start.

Review what your software assumes

For years, entering two people into a household meant financial planning software married them and filed them jointly, which wrecked the tax math for a huge share of this population. Gifting between unmarried partners eats into the annual exclusion or the lifetime exemption, and somebody has to file for it. Jay pointed to RightCapital's support for unmarried couples filing separately as one reason his firm uses the platform.

Budget more hours for the life side than the money side

Childfree Wealth meets clients monthly and spends more time on behavior and direction than on portfolio work. “You will have to spend more time on life planning than you do on financial planning,” Jay said. “It’s just a different approach.” The monthly cadence exists because there is always something moving in a childfree client’s life (including that they tend to be more nomadic). It’s also why Jay doesn’t believe the one-and-done plan works here at all.

Without the script most people inherit (school, marriage, career, retirement, pass it down), somebody has to help the client write their own. The question Jay starts with is what the client wants to be when they grow up, asked half-jokingly of clients well into their 80s. Most have no idea. Nobody has asked them.

Jay uses what he calls the obituary exercise. The first line is name, age, place. Jay died at this age, in this location. The second line for most people reads "father of three, survived by Jack, Joe, and John." For his clients, that line will be different, and filling it in tells him what the plan is actually for. What’s the legacy that isn’t children? What’s the legacy beyond lineage?

Where the opportunity lies

The childfree population is 60 million people, and most of them have never had a financial plan written for them. Many who tried felt like they'd been squeezed into something built for somebody else's life.

The planning for childfree clients is genuinely different as it can involve households with no legal protections, no family safety net, long-term care that has to be solved decades early, and a spend-down problem where the profession has spent a century teaching accumulation. That is exactly why the field is so thin. Most childfree prospects who ask "how would my plan be different?" get some version of "it wouldn't." An advisor with a real answer will stand out.

Dr. Jay Zigmont, CFP®, PhD, founded Childfree Wealth and Childfree Trust. He wrote Portraits of Childfree Wealth and The Childfree Guide to Life and Money, and holds a PhD in adult learning from the University of Connecticut.