Retire Before Your Kids Leave Home, Not After

I just got a nice comment on my post, Why All the Rich People I Know Already Have Life Insurance. It was the last line that stood out. Here's what Marc had to say.

I had life insurance ($1M) through my employer back when I was full time, but since I cut back to 10 hours a week I no longer have it. My partner still has his for work (also $1M) on the cheap, but if he quits in the next few years we will no longer have life insurance.

I'm not as sure about it as some of the pre-Fire people you mention, but we don't see the point of life insurance for us. We keep 3+ years worth of our emergency fund in cash, so we avoid some of the concerns raised in the article. That said, we have an umbrella policy. Unlike our financial needs in the case of a sudden death, there are no penalties for personal liability, especially in a criminal state like California.

In context, we are in our 50s with kids in middle school and high school, in the south SF Bay Area. Net worth > $10M.

Marc and his family are obviously doing well. Thanks to them. However, I have yet to meet anyone in real life who is rich, has children, and does not have life insurance. However, I have met many people online say they will stop their work when they stop working. But I still have doubts.

Saying you're going to do something when you've reached a milestone and doing it once you're there are two completely different things. Money has feelings, and we are creatures of habit. This is why the one-year syndrome exists.

But this post is not about whether you should keep life insurance if you are DEAD with children. (Apparently it shouldIt's about something bigger: whether to retire while your kids are at home, or wait until they're gone.

My opinion, if you can afford it: don't wait.

Relax When Your Kids Are Home, Work After You Go

When I read those words, a house worth over 10 million dollars, a middle school student and a high school student, and a spouse who was planning to retire in a few years, I was surprised. Personally, there is no way I could continue working if I had this kind of net worth and both of my children within five years left home for good.

We all know that by the time your child turns 18 and heads off to college, you've probably already spent the most time you'll ever have with yourself. The widely cited “Tail End” analysis puts that number at around 90% or higher. After leaving, he lives peacefully.

And I already feel an incredible urgency about the time of my 40s. I can only imagine how much I'll want to protect it when I'm 50 like Marc and his wife.

More Money Changes Nothing

Choosing to earn more money when I already have $10+ million, instead of spending more time with the people I love the most, is a no-brainer for me. I don't understand how working 40-60 hours a week to earn an extra $500,000 before taxes is going to change my life.

But I also understand that money and position are intoxicating and difficult to walk away from. Meanwhile, some people have truly amazing jobs that fill them with joy, purpose, and love. We all deserve to pursue what we want, not just what is best for our children. So I get it. There is no one right answer here, only the one that fits your life.

I wasn't lucky enough to support my passion for finance after 13 years, so I wanted out. But I was lucky enough to keep my love of writing alive for 17 years, writing before my children woke up and while they were in school.

The General Approach Against the FIRE Route

There are two common ways people balance work, money, and children.

Common method: work, have kids when you're financially stable, keep working to provide for them until they finish college, then quit. Children are expensive and time consuming. No one denies that. And there's no upper limit to what you can spend on if you let yourself.

Method of FIRE: focus on your career and save and invest 50%+ of your income for 10 to 25 years, retire early, travel the world and explore passion projects, and have children. In theory, this gives you more time to be present and build stronger relationships. Then, when your children are gone to college or work, you can go back into full-time opportunities if you want.

Both have real tradeoffs.

The normal way usually means having small children. As a result, you get to share a large percentage of your lives together. That is a very big advantage, and you feel it more in the second half of your life.

One of my biggest regrets is having children late. I just wouldn't be around much longer, and I couldn't have more children. The downside of the traditional way is more stress from work and family, less energy, and sometimes weaker relationships and more tension at home.

The FIRE path usually means having children later, because you are so focused on saving, investing, and running away from your job that there is no room for them yet. Then, when you finally pull the trigger, you may find it difficult to conceive naturally due to your biology. And if you have children, you won't have as many years with them as you would like.

The flip side is that you will probably spend a lot more time with them during their first 18 years than you would while working. You may also have more financial resources as a FIRE parent, which can make providing for your family less stressful.

So life is full of trade-offs. There is clearly no better way. There is only the way things are for you, and the way you want them to be.

A Hybrid Approach Seems Right

My wife and I have a running joke: we don't have to both suffer through the same difficult thing. So one way to balance work and family is for one person to grind for a big paycheck while the other stays home with the kids. This traditional version makes a lot of sense, especially since a single parent at home eliminates childcare costs. When your child is eligible for full-time preschool, you can decide whether to send him or her. Just know that being a full-time parent is harder than any bank job, so there's that.

The second version: one or both parents leave their full-time jobs after having children and work part-time or on their own projects at home. You may not earn as much, but you will have more time with your children. The biggest gift of COVID was getting used to working remotely, and actually, getting paid to be around your kids more. What's worse is that many serious firms have since dragged everyone into the office.

The final version, the full version of FIRE: both parents become stay-at-home parents while their investments generate enough income to cover household expenses. Life is somewhat precarious, as market corrections happen all the time. But based on historical returns, it's a long-term option, especially if you can earn some extra retirement income down the road.

The FIRE Path For Career and Parenting

Here is one FIRE method to consider if you are planning to have children. Let's see if my vibe-coded guide works.