I recently received a great comment on my post, Why All Rich People I Know Still 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 worked full time, but since I cut back to ~10 hours per week I no longer have it. My spouse still has hers through work (also $1M) for very cheap, but once she calls it quits in the next couple years we won’t carry any more life insurance.
I’m not dogmatic about it like some of the pre-FIRE folks you mention, but we don’t see any reason for life insurance in our case. We keep 3+ years worth of spending for our emergency fund in cash, so we avoid some of the concerns expressed in the article. That said, we do have an umbrella policy. Unlike our financial needs in the case of an untimely death, there is no ceiling on judgments due to one’s personal liability, especially in a litigious state like California.
For context, we are in our early 50s with children in middle school and high school, south SF Bay Area. Net worth > $10M.
Marc and his family are obviously doing great. Kudos to them. However, I still have yet to meet anybody in real life who is rich, has kids, and doesn’t have life insurance. Although, I’ve met plenty of people online who say they’ll drop their coverage once they stop working. But I’m still skeptical.
Saying you’ll do something once you hit a milestone and actually doing it once you get there are two completely different things. Money is emotional, and we are creatures of habit. It’s why the one more year syndrome exists.
But this post really isn’t about whether you should keep life insurance once you’re FIRE with kids. (Obviously you should.) It’s about something bigger: whether to retire while your children are still at home, or wait until after they’ve left.
My view, if you can afford it: don’t wait.
Retire When Your Kids Are Home, Work After They Leave
When I read that comment, a household worth over $10 million, with a middle schooler and a high schooler, and a spouse planning to call it quits in a few years, I was surprised. Personally, there is no way I would keep working if I had that kind of net worth and both my kids were within five years of leaving home for good.
We all know that by the time your child turns 18 and heads off to college, you’ve likely already spent the overwhelming majority of the in-person time you’ll ever get with them. The widely cited “Tail End” analysis puts that figure at roughly 90% or more. After they leave, you’re living off the final sliver.
And I already feel an incredible urgency about time in my late 40s. I can only imagine how much more fiercely I’ll want to protect it once I’m in my 50s 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 most, is a complete non-starter for me. I just don’t understand how spending 40-60 hours a week to earn another $500,000 before taxes is going to positively change my life.
But I also understand that money and status are intoxicating and hard to walk away from. Meanwhile, some people have genuinely amazing jobs that fill them with joy, purpose, and passion. We all deserve to pursue what we want, not just what’s best for our kids. So I get it. There’s no single right answer here, only the one that fits your life.
I wasn’t lucky enough to sustain my passion for finance after 13 years, so I wanted out. But I’ve been fortunate enough to keep my passion for writing alive for 17 years. I write before my kids wake up and while they’re at school. It’s always satisfying to put idea to paper and hear from y’all.
The Conventional Path Versus The FIRE Path
There are two common ways people sequence career, money, and kids.
The conventional path: work, have kids once you’ve got some financial stability, keep working to provide for them until they finish college, then retire. Kids are expensive and time-consuming. Nobody denies that. And there’s no upper limit to what you can spend on them if you let yourself.
The FIRE path: grind in your career and save and invest 50%+ of your income for 10 to 25 years, retire early thanks to passive income, travel the world and explore passion projects, then have kids. In theory, this gives you more time to be present and to build a stronger relationship. Then, once your children leave for college or work, you can ramp back up into full-time opportunities if you want to.
Both have real tradeoffs.
The conventional path often means having kids younger. As a result, you get to share a greater percentage of your lives together. That is by far the biggest advantage, and you feel it most in the second half of your life.
One of my own biggest regrets is having children late. Not only will I not be around as long, I also wasn’t able to have more kids. The downside of the conventional path is more stress from juggling career and family, less energy, and sometimes weaker relationships and more tension at home.
The FIRE path usually means having kids later, because you’re so focused on saving, investing, and escaping your career that there’s no room for them yet. Then, when you finally pull the trigger, you may find it harder to conceive naturally because of biology. And when you do have kids, you won’t get as many years with them as you’d like.
The flip side is you’ll likely spend far more time with them during their first 18 years than you would have 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 tradeoffs. There is no objectively better path. There’s only the way things actually unfolded for you, and the way you wish they had.
The Hybrid Way Seems Optimal
My wife and I have a running joke: there’s no need for both of us to suffer through the same hard thing.
So one way to balance career and family is for one person to grind for the big paycheck while the other stays home with the kids. This makes a lot of sense, especially since one parent at home eliminates childcare costs. Once your child is eligible for full-time preschool, you can decide whether to send them. Just know that full-time parenthood is harder than any banking job, so there’s that.
The other hybrid version: one or both parents leave their full-time jobs after having kids and work part-time or on their own projects from home. COVID’s greatest gift was normalizing remote work and, in effect, getting paid to be around your kids more. The money will be tighter and you’ll likely pay the full cost of health insurance, but you’ll never get these years back.
The Problem With Going Back To Work After The Kids Leave
The plan to FIRE before kids, spend their childhood with them, then return to full-time work once they leave sounds great in theory. But it has some obvious holes.
The first hole is timing. Say you retire at 50 and have a child through IVF the following year, with your wife at 43. You’ll be 69 when that child leaves home. Do you really think you’ll have the energy and desire to go back to work full-time then? Probably not. And even if you wanted to, employers may not be lining up to hire a 69-year-old, the same way a life insurance company is unlikely to hand you a fresh 30-year term policy at that age at an affordable price.
The second hole is wealth. After 18 years, you might be so wealthy that working for someone else feels completely illogical. You’re already FIRE, which means you have substantial investments compounding for you. Eighteen years of growth at even just 8%, while withdrawing 3.5%, would more than double your net worth. So if your $10 million became $20+ million, why on Earth would you go back to work for less than $1 million a year at age 69?
The Main Solution To Having Both A Career And Family
For me, one year of full retirement was enough to know neither extreme worked. The answer was designing a lifestyle that gave me more control over my time.
A lifestyle business, consulting, writing, part-time work — anything that pays you while leaving you in charge of your own calendar. You get to be there for breakfast, school pickup, and the random 6:20 am snuggle, without giving up income or identity entirely. You don’t have to choose between being present and being productive. You just have to design a life where the two stop fighting each other.
That’s the whole point. Money buys you the option to be there. The real tragedy is spending your healthiest years earning money you’ll never need, while that 90% quietly slips away.
It’s also a big reason I’m writing my next book, Your Children Will Be OK: Helping Them Navigate An Uncertain Future (2027, Portfolio Penguin). The most valuable thing we can give our kids isn’t a bigger inheritance. It’s our time, our presence, and the confidence that they’ll be fine. Money helps. But showing up is what they’ll actually remember.
Readers, if you had a net worth of over $10 million, would you encourage your spouse to keep working full-time while your kids were still in middle school and high school? Are financially independent parents underestimating how much they’ll miss their children, and how much they’ll regret not spending more time with them, once the kids are gone? Why don’t more parents who have the money retire with kids at home instead of after they are gone?
Know Exactly Where You Stand Financially
Debating whether to retire while your kids are still at home? First, know what you actually have. Sign up for Empower, my favorite free financial tool. I ran my 401(k) through its investment analyzer years ago. The result: I was quietly paying thousands a year in unnecessary fees on actively managed funds.
I switched most of the portfolio to ETFs and have saved over $50,000 in fees since. Grinding at a job you’d rather leave while bleeding money in hidden fees is a painful combination. You can fix it today, for free.
The cleaner your picture of your finances, the easier the real question gets. Can I afford to be more present right now, before time with the kiddos slips away?
Want a free financial review with Empower? Link over $100,000 in investable assets and you’ll qualify. Check out this post for my full experience.
