Will My Kids Be Okay If I Retire Early?
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.
- Early retirees are lazy.
- Kids must see you go to work everyday. That’s what adults do.
- Kids won’t be good with money if they never see their parents work for money
- Other kids might think your kids are suffering because you don’t have a job
- Kids will worry about family money issues
- 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.
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.
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?