Will My Kids Be Okay If I Retire Early?

kids-early-retirement

The Question Of The Day:

Is it possible to retire early to a life of leisure while raising kids that understand hard work and success?

My answer: YES!

Some people are afraid to retire early while their kids are still young and impressionable.  They are afraid their kids will watch them do nothing all day then adopt those practices and fail at life.  So far that hasn’t been an issue for me or my kids.

I think the fear of being a bad role model comes from a few misconceptions.

  1. Early retirees are lazy.
  2. Kids must see you go to work everyday.  That’s what adults do.
  3. Kids won’t be good with money if they never see their parents work for money
  4. Other kids might think your kids are suffering because you don’t have a job
  5. Kids will worry about family money issues
  6. Kids will suffer from an entitlement mentality

Just so you know I speak from a position of some authority on kids and early retirement, I have a one year old, a seven year old, and an eight year old.  They get good grades in school and haven’t broken any bones so far.  I’ll go ahead and nominate myself for parent of the year on that basis alone.

1. Early retirees are lazy

This one makes me chuckle a little.  I’m still waiting for a week where there’s nothing to do and I can lay in my hammock nursing a beer all day.  Scratch that – I would get bored after a day or two.

The reality of early retirement is that you tend to stay as busy as you want to.  After spending an hour or two throughout the day on the bare minimum of surviving, you can be lazy or be ambitious.  With kids, you’ll probably be spending more than an hour or two working to get by each day, so laziness is somewhat limited.

Most early retirees I know tend to be pretty ambitious, energetic, curious, and interested in learning or trying new things.  Not the type that could sit on a couch all day watching Oprah and Judge Judy (or whatever airs on daytime television).

My kids see me doing a wide variety of different jobs and pastimes around the house.  They watch me repair things (often things they broke…).  My oldest daughter often comments, “Daddy, I’m so glad you are an engineer”.  I assumed knowing how to repair electronics and appliances is common knowledge, but to my kids it is something special.

I always explain what I’m doing as I’m working and let the kids help out whenever it is safe and feasible.  They see me watching youtube videos on roofing, appliance repair, and electronics troubleshooting.  I have always taught my kids that they can do it when they try.  They see me putting that advice into practice as I try to fix stuff around the house.

Outside of being a tinkering engineer, the kids also see me playing with my spreadsheets and taking care of our finances.  “That’s how we keep food on the table” I tell them.

They look over my shoulder and watch me knock out foreign language lessons on Duolingo and improve my fluency gradually.  The kids even started their own Duolingo lessons for a while.

I recently joined a Coursera course on financial markets.  I explain how I’m taking a college class just because I’m curious and want to expand my mind.

They observe me learning new skills, and I have already seen them pursuing their own learning.

 

2. Full time job = hard work?

My kids don’t see me working hard at a full time job.  Not that kids ever see their parents working at their full time jobs since the kids are in day care or in school, or at home with a non-working parent caretaker (and not sitting in the cubicle next to mom or dad).  From a kid’s perspective, their parents disappear when they go to work.  Working in an office is something rather abstract to a kid.  In contrast, seeing you creating, fixing, and learning at home is very concrete.  Whether I write a blog post, prepare a nice family dinner, or fix something that’s broken, they can see me applying intellect, skill, and experience to accomplish a goal.

So really, my kids see me working even more now than they did when I was working full time at my old job.  Now they see me spending a lot more time doing useful things like fixing broken electronics and appliances, managing our finances, and having fun.

 

This is the kind of hard work I like these days.  Toilet paper forts don't build themselves after all.

This is the kind of hard work I like these days. Toilet paper forts don’t build themselves after all.

 

3. Kids won’t learn how to earn money if they don’t see parents working

My youngest child is almost two and he probably won’t remember his parents working full time.  Even though he won’t see us earning money through full time employment, he will still see us working at different pursuits (that don’t always earn money).

We always explain to our kids how the household finances work.  We go to work, we get paid.  Part of the paycheck pays for the house, the cars, and the food on the table.  The rest of the paycheck goes into our savings account and investment account.  They know we saved a lot so we wouldn’t have to work forever.

In early retirement, the explanation is a little different.  Now we are spending small amounts of the money we saved up over the years.  I say “spend small amounts” because that’s how you live off an investment portfolio in early retirement.  The kids already understand how investments work on a conceptual level.  We own tiny bits of lots of different businesses.  Our businesses make money and pay those profits to us in the form of dividends.  The businesses get more valuable, and we can sell some of the businesses if we need more money.

Right there, in two paragraphs, I have summarized how to work for money, save money, grow wealthy and live off of investments indefinitely.  In kid terms.

In addition to our investment income from our portfolio, the kids also know about our other sources of income.  My older kids watch me sell a couple of things on eBay and then see the $20 or $30 per item I earn.  I show them how the advertising on Root of Good works and how lots of visitors arrive, then a few might click on a link to a product or service and an even smaller subset might “convert” into an eventual sale that actually pays some revenue.  My oldest daughter decided to start her own blog and perhaps one day we’ll walk through the steps of monetizing her content.

Even if the kids don’t see me working full time, they still see me working my “hustles”.  I’m going to steer the kids toward some form of college and a “regular” career (it’s what worked for me!) but I definitely hope they pick up a hustle here and there if they want to earn a little extra income, or turn a profit from a hobby.

Our older kids will definitely remember our full time career days.  We scrambled to get them ready for school or rushed to pack them up to spend the day with grandma so we could go to work.  And then in the evenings, we repeated the process in reverse.  Pick up the kids, rush home, figure out dinner, rush to make sure all the homework is complete and correct, get them through the bath and bedtime routine, and then maybe have a few minutes of peace and quiet before bedtime for the adults (knowing the process would be repeated in another 7-8 hours).

Even if us parents don’t work, they still see other examples of working adults all around them.  Their aunts and uncles, parents of their friends, characters on television and in books, and their own teachers.  Everywhere we go people are working.  Restaurants, stores, the community center, and the library are filled with employees working.  Just because they don’t see us pulling out of the driveway at 7:00 am Monday through Friday doesn’t mean they won’t get the concept of what full time work entails.  They still see the cars pass by our house during the morning and evening rush hour.

 

4. Other kids (or their parents) might think your kids are suffering because you don’t have a job

People think all kinds of crazy things.  As long as you take care of your kids and provide food, shelter, clothing, and attention, you are fulfilling your parental obligations.  Parents should have a wide latitude to raise their kids however they want, and if your lifestyle is a little different from those of other families, that is okay.

Early retirement itself deviates from the norm of mainstream culture (go to school, go to work, retire when old, die).  I bet you don’t really care what those other kids or parents think.  Live an awesome life on your own terms and let others take you for who you are.

Most other families won’t know much about you or your finances anyway.  Even if you publish a blog for the whole world to read, odds are none of your kids’ friends’ parents are reading your opus magnum.  No one knows (or cares) you read Root of Good and that you are secretly plotting an early retirement at a deviously young age.

Plot away, and retire whenever you want to.

5. Kids will worry about family money issues

If you keep your kids in the dark about family finances, then this might be a real concern.  At some age, kids understand that working at a job equals money.  If they see both parents without jobs, then they might conclude (absent any other information) that their family might lose their house or not be able to buy groceries (or they might lose their video game system or not be able to buy new games for it).

The best antidote to this problem is open and consistent communications about money and how family finances work.  I just quizzed my eight year old on her fears of whether we would run out of money.  Here’s her response:

No, I’m not worried.  I know that we live off one of your incomes and you have your life savings, too.

 

When asked what will happen when Mommy quits her job and neither of us have jobs:

Then we will have two life savings that we can live off of forever.

And if we spend it all?

We can always make creations and sell them.

And there you have it.  If we hit really hard times and we need more money, we can always find ways to earn more money (making things, part time work, or freelance work for example).  I suggested that we could sell her little brother and she didn’t like that idea, claiming him as her own.  Then he chimed in with one of the twenty or so words he knows and kept saying “mine” and pointing to himself.  So he’s not for sale.

My eight year old gets it.  She knows we’ll be okay in early retirement and won’t run out of money if we stay a little flexible.  She knows we don’t spend that much, and we can always make a little money to get by if we need to.

Kids are also focused on so many other things during childhood that it’s unlikely they will worry about their parents’ checking account balance as long as they have a roof over their head, cookies in the pantry, and the occasional hot meal on the table.  Kids just don’t think about the big picture adult concerns all that much.  Mine are focused on fighting with each other, maximizing television consumption and dessert consumption and avoiding homework.  They think about their school work, their friends, and the books they are reading.

If I had to estimate the odds of my kids worrying when the Dow drops 5% in a week, I would say zero.

 

6. Kids will suffer from an entitlement mentality

This might be a concern if you live an indulgent lifestyle and your kids don’t have a good perception of money.  Our kids know you have to earn money.  They know once you spend money, it’s gone.  And they know you can save it and invest it and turn it into more money.  But you can’t save it if you spend it, so you must always make choices.

If kids are raised in an environment where money gets spent without any thought, then they might learn you don’t have to be careful with money.  They might assume money grows on trees and mom and dad are an unlimited source of the green stuff.

From what I have seen of other early retirees with kids, their families tend to be responsible with money.  They make smart spending choices and treat themselves to something nice on special occasions.  They communicate with their kids about money and making smart choices.  It’s hard to imagine a kid developing an entitlement mentality when raised in that type of environment.

 

 

Closing thoughts

If you have the financial means to retire early, don’t stick with a day job you don’t love just to appear busy to your kids or to fit in with the other working families in your social circles.  Don’t be afraid to retire early and spend more time doing whatever makes you happy.  You’ll be a lot less stressed out and will definitely have more quality time to spend with your children before they grow up.

 

In my next post, I talk about the advantages of retiring early while your kids are still in the house.

 

 

Do you have kids and plan to retire early while they are still young?  Concerned?

 

 

Related Posts Plugin for WordPress, Blogger...

40 comments

  • I don’t have kids yet, but if/when I do, I will likely already be retired, so that’s all my kids would know. Everything you say here makes perfect sense and I am 95% sure that I trust that it’s ok. But I can’t help that nagging sensation from not having evidence of kids who have grown up in theses situations already. But there will always be doubt in life and in raising kids, so I understand that you can’t be paralyzed by the idea of screwing up your kids too much or else it will be a self-fulfilling prophecy.

    • I have been on the Early Retirement forums for around 10 years now. So I have been able to watch 10 years of kids growing up (as presented by their parents). I guess the unsuccessful parents whose children don’t do well in life might be less inclined to post, but overall, the kids I have seen coming of age with ER’d parents tend to do pretty well objectively speaking. They get good educations, good jobs, seem to be savvy enough with money (or at least aware that money savvy is an option!). This is a limited, self selected sample, and not some longitudinal study or double blind experiment (which would be cool!), but gives me enough evidence to think everything will not only be okay, but awesome for kids of early retired parents.

      It’s hard to imagine a better resource than two caring parents who have their own stuff together being there all the time for their kids!

  • This is a great post. I might even reblog this later if I think of anything profound to add.

    A lot of these misconceptions and your responses to them dovetail nicely with why I cut down to PT weekend work so we could homeschool. Our FIRE timeline won’t have us completely free until the oldest is an adult and the younger ones are in their teens, but I so wish we could do it faster!

    It’s actually kind of silly that people would even think this way!

    • Thanks for stopping by again, Goblin Chief!

      “Silly” is a good word. I’m surprised that word didn’t weasel it’s way into my post.

      I did use the word “crazy”. :)

      Some folks are totally fine with accepting the conventional way of life and never questioning whether there is something more optimal out there (for themselves and their kids).

      • Thinking more about the post, I’m impressed at what you relayed about your kids and learning about money. That’s one thing I need to do better. Currently, while my kids understand the need to not waste money, they’re of the “if I have money, I must spend it” mindset.

        I will be starting an investment experiment with them soon. Instead of opening savings accounts for them, I’ll be opening a Vanguard account and investing the money. I’ll also take the small savings account we had for our godson and adding that to the pot. Between the three kids’ Christmas $ and the godson’s account we have about the minimum $1,000 to buy into one of the Total Market funds. Savings accounts are ‘traditional’ and more tangible but inflation eats the money alive.

        I think the deal I’ll strike that each of them will get “paid” when they hit 18, with shares being something like 30-30-30-10 (the small share being for our godson).

        I am also going to try and encourage cash gifts as much as possible going forward. They get showered in plastic crap and way more clothes than they need. Kids need some toys and some clothes, but funneling generosity into their future instead of environmental depletion is a win-win all around :D

  • Totally. Agree.

    You’ll model such great things and help encourage your kids to think outside the proverbial box… or TP castle. That’s a lot of TP.

  • If things go according to plan, we’ll be “retiring” while Daughter Person is in late middle school/early high school. I’m not sure that it’s that uncommon in this area as people tend to have kids later in life here, so there may be several classmates that have retired parents. But then again, they may continue working for college tuition.

    We’re hoping to teach her how to value money rather than start in so much debt as we did.

    • I haven’t considered the possibility of older parents retiring (possibly in their 60′s) with kids still in K-12. I guess it isn’t that uncommon any more. That furthers my point that it’s okay to retire with kids still in the house. The only difference between retiring while 30- or 40-something and a more traditional 60-something is that the younger retirees were more efficient (and often higher earning) than their older counterparts.

      Kids absorb everything you do, and if fiscal responsibility is a focus in your life, the kids have a great shot at absorbing at least some aspects of good money habits as they come of age.

  • Amen to #4! You nailed it.

    I foresee us catching flack in a few years when we transition to a weird, partial FI life. But so long as my wife and daughter are warm (or cold, in the Houston summer!), fed well, and loved, I KNOW we are doing well.

    And while they think I’m crazy, I’ll continue to think they’re crazy for putting their 6 week-old baby in day care so that mom can go “take care of” 22 third graders. ;)

    • As crazy as it sounds, some people put forth the argument that you should keep working “as long as possible” to earn as much money as possible and spend it on your kids. That’s the secret (so they say) to ensuring your kids are well taken care of. Although that begs the question of “what is enough?”.

      If you take one awesome international vacation every year with your kids, there will be critics that say you should keep working until you can afford to take TWO REALLY REALLY awesome vacations every year. Driving one domestic minivan? Keep working till you have enough money to buy TWO BIG SUVs! Otherwise, they allege, it’s child neglect. ;)

  • I’m a big believer that younger generations are going to dismantle the 9-5 career idea. I would have loved for my parents to teach me that working wasn’t or shouldn’t be all there is to life or all to strive to. I personally think your children are lucky to see that you can make a great life happen with planning, handwork, and dedication.

    • Love that thought that our kids will dismantle the 9 to 5 routine. I had a rambling post yesterday about how weird social norms can seem if you step back and think about them.

    • I think kids coming of age today are certainly holding employers to a higher standard. They have been collectively criticized for their high demands. And at the same time, companies complain about inability to attract and retain employees with cutting edge skills, creative talents, and those in touch with today’s consumer. Guess which generation probably has lots of those skills? :)

  • I will be “retiring” soon with 2 teenagers at home. My biggest fear is that someone will judge me for not continuing to work for their college expenses. They will each have about $50K that their dad and I have saved for their college. And while that will likely not be enough, I can’t see staying at a job I don’t like to try to come up with the imaginary “enough”. But I absolutely know that they won’t have any problem with me leaving my job. They feel the effects of my stress. Soon they will be feeling the effects of my having time to provide them with more robust enrichment experiences, like arranging job shadowing, meeting and interviewing people in the fields of interest my kids have, teaching one how to sew, spending the summer playing…I have a long list already. But the fear of being judged for not working is intense.

    • Right! Where does the expectation stop? 100% paid for college? Down payment for a house? Covering a lavish wedding? Funding a year of backpacking around Europe?

      They will probably end up better off having a financial stake in their education (I know I did!), and having you around to help out in the mean time.

  • While teaching kids about hard work, you can also teach them that one of the successes of hard work is early retirement. Hard work doesn’t have to last your entire lifetime….something my mother doesn’t understand. I think her generation calculated everyone’s worth, not by how much they had, but how hard they worked.

    • At some point you have to stop and ask yourself, “What’s the point of hard work?”. It’s a great way to make money, but at some point you should enjoy the fruits of your labor.

  • I love your kid version of earning, saving and investing money! I have three little one (2, 4, 6) and we strive to teach them about money. They know about our finances– that we are earning money to pay for Daddy’s law school. They know that when you borrow money you have to pay interest, so that’s why we want to pay Daddy’s law school loans as quickly as possible.

    My 6-year-old is a little entrepreneur who comes up with all sorts of ideas to make money because she sees my selling things and making money in my etsy shop. It’s pretty cute.

    Oh, and that TP fort is priceless. Thanks for sharing :)

    • Priceless lessons for your kid to learn! When they see you working side hustles, they will grow up knowing a 9 to 5 isn’t the only way to make money.

      And glad you liked the TP fort. Building that was pretty fun.

  • This is a really interesting post, Justin. I appreciate learning about how you speak to your kids about finances. My wife and I are expecting our first child in a few months, and the plan is to be financially independent by the time he/she is 9-10 years old. Thanks for sharing your experience!

    • I’m always looking for little teaching opportunities for financial topics. They don’t always do a great job of teaching personal finance in school (K-12 anyway). FIREing with kids around 9-10 works out pretty well. You can travel very easily, and they are independent enough to give you some free time. But not too old that they don’t want to spend time with you. :)

  • We have a 16 month old and are contemplating one more? I’m 4 months to 4.5yrs from ER, depending on whether I get approved for an early retirement from the military. My only real concern is will we be stretched too thin with two kids-you make it look easy with three? So far my rough estimate is that each kid will average around 450$/month, early in life. Thoughts??

    • I’ve found child costs are highly variable. We didn’t spend a whole lot on ours (generic baby food and store brand diapers helped, as did feeding them table food early on instead of jarred/packaged baby food). Hand me downs were plentiful (lots of older cousins/friends). We re-used most of the big ticket items (car seats, strollers, high chairs, walker, crib, etc) and skipped many of the “essentials” (baby bjorn, fancy car seat/stroller combo things, changing table, glider/rocker, decked out nursery, massive SUV to haul them around, etc). Our kids turned out awesome in spite of (or due to?) this “neglect”! ;)

      If you’re ER’d, child care will obviously be tiny or non-existent. That will save a bundle if you are incurring the expense right now. For us, we are starting to see a need for a vehicle slightly larger than a honda civic, although the Accord does the job just fine. Next car might be a minivan so we can haul an extra friend or two, or a grandparent along with our 2 parents + 3 kids.

      Also, stay tuned to Root of Good! I’ll have a post out on Wednesday on advantages of retiring early with kids. It might impact your decision making / budgeting for kid costs.

  • I’ve often wondered about this, but this post makes a lot of sense. I don’t have kids yet, but I always think about how I will teach them about money and how involved they will be in the family finances. I guess kids are raised in an early-retiree household, anything else would be “weird” to them. FI would just be the norm :)

    • The older kids will always remember our working days, but the little guy won’t remember either of his parents working. Unless we pick up some small time freelance gigs or get a part time job, he won’t see us working for money.

  • Can’t contribute to this as l have no kids. I just had to laugh at the TP fort!!!!! That is a lot of toilet paper..lol! Good point though, about when us enough enough??? It’s nice to enjoy the fruit of one’s labour..

  • I think that the people who have criticisms don’t realize that it takes time and a different lifestyle to retire early. Once you hit FI, you still have the same values which your kids will see. Your kids don’t see you spending frivolously, they see you saving and being careful with your money.

    I babysit children from a very affluent home and although the older child is only 4, he already says things that show he feels entitled. Kids pick up lot from their parents. The parents don’t talk to this 4 year old about their finances, but he already knows that he can have any toy, anything to eat and that whenever anything is broken in his home, a man will come to fix it. It’s amazing what they pick up on. He likes to ask me questions about my house–if it’s big, how many toys I have. I tell him that I live in a small home because that is all that I need.

    • Kids definitely pick up money habits and perceptions based their experiences growing up. And mostly learning by observation. If kids get used to a high consumption lifestyle, they will probably emulate that lifestyle as adults since that is all they knew growing up.

  • As a parent working from home most of the time with my son around, I fully agree with your thoughts. Excellent post. Thank you.

  • Can’t wait for your post on the advantages of retiring early with kids. The part where you described the life of 2 working parents struck a chord with me. That is my life now and it’s tough not being able to spend more quality time with your child. I guess I can see how some might feel that kids might not learn hard-work if a parent is always at home…but I don’t agree. I’d much prefer that the parent was home to teach and reinforce the qualities of hard-work and teach them financial skills rather than leave that to a daycare provider (who’s job is not to instill these into your kids).

  • Is there a better time to have kids than when you’re FIRE’d? You finnaly have the time to do it right! I am 5 years out from FIRE’d (could be earlier…). I got married in the last year and lam ooking forward to having some little ones around…

    • From a time perspective, I think the FIRE lifestyle fits perfectly with raising kids. Some would argue kids are really expensive, therefore it’s easier to afford kids while you are still working. So far, we haven’t seen huge kid costs (with the oldest kid almost 9 years old).

  • My biggest concern is your kids eventually resenting your freedom while they march off to school each morning. My mom was a stay at home mom even when I was in high school and those thoughts crept into my head when I was at school from dark to dark…

    Overall though, I think it’s great for your children to see an alternative lifestyle. In our society (as you I’m sure know) the 9-5 is really all that’s marketed to kids. There is an alternative!!!

    • I have heard that already! “It’s no fair, you get to hang out at home all day and we have to go to school!”. I mentioned the 13 years of K-12 education, then six more years earning 2 bachelor’s and a doctorate. Take that, kids! :)

      I offered to homeschool my kids so that they can work at their own pace. So far, I haven’t had much luck getting them to take me up on the offer. I think they are scared of hard work!

Leave a Reply

Your email address will not be published. Required fields are marked *