Life Expectancy, Retirement, and Your Kids...

Seth's comment on my 529 plan and financial advisor and our subsequent meet-up at the Denver FOJ led to him recommending a book to me. A few days ago, I picked up The Number.

Man, it is earth-shaking. At least to me.

Why?

Well, if you are concerned about saving for retirement (whatever that means) and figure that Social Security won't be there, this is the book for you.

What's more, it raises some very interesting issues.

For example...when Social Security began, lifespans were about 65 years, at best.

Now, if you make it to 60, you have a 30% chance of making it to 90.

What this means is that many people have woefully underestimated "the number," that is the amount of money they will need so that they don't outlive it. Plus, with improving healthcare, your odds of living longer continue to increase, but those years are increasingly expensive.

All of those boomers who figured on inheriting a huge amount of wealth as the WWII generation passes on made one miscalculation...their parents are living longer than anyone could have expected at the time of their births.

That means that boomers and people going forward will have to (or potentially have to) financially support increasingly elderly parents.

In and of itself, this is pretty significant.

But today, it dawned on me that it could mean a shift in the cost-benefit analysis of having children.

A friend was congratulating me on Baby #3 and asked me, "so, how many are you going for?"

"I take it one game at a time," I said, and then putting it all together, I added. "You know, it's a long-term ROI diversification strategy." I told him about the concepts of The Number and said, "the way I figure it, the more kids I have, the more sources of income I will have to help us as we grow old. Instead of taxing one kid, I'll be taxing at least 3."

Once upon a time (agrarian society), you had a lot of kids because you needed them as labor for the farm. In the industrial/early post-industrial era, kids became VERY expensive (and still are). I wonder, now, if the pendulum is swinging the other way because of increasing lifespans, lack of social welfare net, and most people's inability to properly save and plan for post-working years?