First Retire, Then Have Kids

The following guest post is from Mr. Money Mustache (check out his blog by the same name, More about him immediately following the article.

I have a far-out idea to share with the next generation of the American middle class.

Right now, I’m speaking specifically to the young people who are finishing up a college degree, perhaps in a promising field, and starting to get interviews for jobs with salaries they could only dream of just a few years earlier. The Adult World lies exciting and vast before you, and the Opportunities are unlimited!

At this point, let’s imagine you just dive in and start playing it by ear. You work hard at the new job, buy a new car, rent an apartment, enjoy restaurants and vacations, and may even save towards the downpayment on your first house.

There is usually a student loan still kicking around, and then a car loan, and maybe even some credit card debt that pokes its head in at some point. Meanwhile your new career advances quickly and within a few years you’ve almost doubled your new graduate salary – perhaps you are now making $60-100k or more.

Eventually, you might pair up and move in with your true love, so that you are now sharing one nice place. Maybe it’s even your very own home. Now you’re about 30, and you are one of the lucky households with an income of well over $100,000 per year! But you’ve still got two student loans, two car loans, assorted other debts, and when you add everything up, you still have a net worth of less than zero.

You are thinking of starting a family, but something doesn’t feel right about your financial security. How did you work so hard for almost ten years and still end up having less than zero dollars? At this point, you turn to the Wise World of Financial Bloggers to see how to clean up your act. And you begin the long slog to get out of debt, just as your expensive first baby is born…

But since this surprisingly realistic example is still just fictional, let’s stop and rewind it back to the beginning. What if the college student or recent graduate could receive the life-changing advice of one of us Thirtysomething financial bloggers, and use it to their advantage? What knowledge could the wise blogger impart?

Here’s what I would say:

“Hey young fella (or lass). It’s me, Mr. Money Mustache. Congratulations on entering the fantastic world of Real Work!

But before you take off running, take a look over here on the side of the grand hallway we’re standing in. There’s a little doorway that most people don’t even notice, called Real Wealth. If you take that particular door, you have the opportunity to become quite rich by the time you’re in your early 30s… right around the time the rest of your friends are just realizing they must have done something wrong because they are still recovering from debt!

In fact, the situation through this door is so good, that you can even quit work entirely in order to spend time with your future children, and for the remaining 70 years of your life, work will be an enjoyable and optional part-time affair of pursuing your true passions in life. Sound good?”

As the New Graduate, you would probably be pretty excited to go through that door. It would put you on the path to True Early Retirement. Instead of spending all your money, I’d advise you to live on about $15 to $25 grand of take-home pay per year, and if you pair up into a couple, the number would become $20-$35k.

The rest – and I mean ALL the rest, regardless of how much you earn, goes into your early retirement fund. Maximum contributions to the 401k, and to Roth IRAs, and then beyond that to more low-churn growth investments that don’t generate taxable gains. Maybe even a rental house or two if you really want to be on the Bullet Train plan.

A plan like this may sound quite tricky if you’re currently stuck in the American Ultraconsumer mindset. But as someone who followed this exact path myself, I can tell you it is absolutely enjoyable, fun, and even still quite luxurious. I still owned houses and reliable cars and a nice bike, and did a reasonable amount of restaurant eating and travel through the whole process.

The only difference between me and my indebted thirtysomething peers is that I was much more careful about considering each purchase to avoid wasteful ones, and I was adamant about never borrowing for anything other than a house. And I married a woman who was willing to live the same fun lifestyle to reach the early retirement goal together.

The ultimate reward for us came with the birth of our baby boy in 2006. We had already retired from our real jobs and could share the joy and pain (OK, mostly pain for the first few months) of parenthood together, with none of the compromised career-juggling lifestyle that defines our country.

We actually do enjoy working, and still do a small and non-mandatory bit each week to bring in extra savings and interact with other adults. But taking the entire pressure of finance out of your life so early on, so that you can enjoy the next SIX DECADES focusing on more worthwhile things, is a worthwhile thing to shoot for as a new graduate.

So which door will you choose, Next Generation of the Middle Class? Will it be more of the same old same old, or do you want to try it the Mr. Money Mustache way?

Mr. Money Mustache is a 36-year-old married man with a 5-year old son living near Boulder, Colorado. He discovered frugality early on in his career as a software engineer and as a result was able to enter an early retirement at about age 30. He started writing the Mr. Money Mustache blog earlier this year after realizing that many people were now earning higher salaries than he and his wife had earned in their careers, yet were still enduring financial hardships every day which were interfering with their goals of raising their children.


  1. One in five have their first child at 30 in the US- as long as you understand the risks. Is your wife your age? Sounds like she had her first child at 32. Beginning at 30- fertility- for a first child- begins the downward trend. At 35 miscarriages and defects begin to rise. As long as you are ok with fertility treatments—I can see this (and later) being a good plan.
    I think you can still work long hours and save like dogs early – and still begin a family younger. Women cannot put off their fertility like men can. But don’t ask me- ask my brother in law’s brother. Doctor in Phoenix working to help lots of 30 to 40 somethings get pregnant- HE is the millionaire.

    • Hi Janette,

      I was 31 when we had our son. Personally, I felt young, but I definitely wanted to get started once I hit 30. We were lucky and had no issues getting pregnant and our child is very healthy. In fact, most of my friends had children in their early 30s. It might have to do with where we live… We decided to stick with one child for a variety of reasons.

      We didn’t work like dogs or give anything up when we started saving. It’s a matter of changing your perspective. We bought a house near work, had dinner parties, went for hikes, biked to work, visited the local library, and went camping. We basically enjoyed the free outdoors and ended up saving about 75% of our income.

      If you choose to start a family earlier, you can still save as much as you can in advance and then determine how much additional work needs to be done between the parents to make it work. For us, both of us being home with our child was very important, so saving for it became quite easy and fun!

      Mrs. MM

  2. I’d love to see some hard numbers. How much exactly do you have saved that you don’t need to work? Our investments and assets are approaching the million dollar mark but we would feel totally insecure and frightened without an income because we are raising children. (Full disclosure – we still owe 100k on a mortgage which we could pay off by cashing out some investments).

    Stuff happens. Kids have special needs that can best be met by paying private school tuition or an individual instructor. What will you do when stuff like that comes up? What do you do for health insurance?

    I recognize you only have one child and I hope I’m not sounding snarky, I’m just genuinely curious how you can live this lifestyle securely.

    We live very happily below our means. We don’t want for anything, including more time with our kids. And neither do our children. (We wrestle with whether or not that’s a good thing – lean and hungry is arguably better for a child’s development).

  3. Hey, that sounds like a good idea but sure would be hard to do! Especially for those of us well past the decision making stage 🙂

  4. I’d just like to point out that fertility declines with age and that if you wait too long to have children you might not end up with any or have a hard time conceiving. Of course this applies more to women, so if you’re a guy you could just marry someone younger I suppose.

  5. Great idea! I wish I thought of this in my early 20s. Just a caution to women reading this… Fertility really takes a nose dive a 35 and starts to slowly decline as early as your late 20s. Waiting is good, but we women don’t have luxury of time that our male counterparts do. We have to balance good timing and our ability to provide for our children with our fertility!

  6. It is hard to direct your children into entering a “promising field” vs one in which they have passion and interest for. My husband and I are in the medical field approaching our 60’s, unable to retire. One daughter will have $300,000 worth of debt upon finishing her medical school, and the other is a recent college grad who can’t find a full time job and is working for a temp agency at $15/hr. We spent close to half a million dollars educating them. Retirement plans tanked although rated as A (high yield bond fund) because of the toxic assets they held and the stock market collapse. So my advice is to keep working until you no longer can, because there may no social security or medicare for you.

  7. Kudos for challenging people to consider alternative methods of life advancement!

    I’m always amazed at how vehemently women defend their choice to have kids young. Yes, there is a fertility decline as you age. Yes, you can still have kids later even without fertility treatments. My sister just had her kid at 42, my mom had me at 40, I have multiple friends having them in their late 30s. I can appreciate that multiple kids means needing the energy to run around after them, and youth can be on your side there, but how about this: don’t have so many kids.

    The sad truth about our society socioeconomically today is that no one wants to believe that things have changed. They want to cling to the past way of doing things because they don’t want to know that they may be their only source of income in retirement, they may lose their jobs in their 50s and not find another one, they may need to unload their prized possessions just to survive. I love your plan simply because it gets people focused early on saving aggressively so they end up better off (as in having more funds) in the long run.

  8. A specific breakdown on how you lived on “$15 to $25 grand of take-home pay per year” would be insightful. Hard to imagine that you didn’t live somewhere with bars on the windows, had no running water, and was frequently visited by rodents. Cheers to you though nonetheless.

    • Just read his blog, which is linked and mentioned at the top of the post. He gets into the nitty gritty details and has many good ideas

  9. Some really good points here. Fertility is a funny thing. Yes, it does start to decline, but putting the fear of infertility into women at an early age is not a good thing. Especially if you are telling them that they are over the hill at 30. Yes, if you wait until you are 35, your chances of getting pregnant are smaller and your ability to have more children declines simply due to the # of fertile years you have left. If you want 3-4 kids, you may have to start earlier.

    There are always lots of anecdotes on fertility. I was nearly-36 when my son was born (it did take me 1.5 years to get pregnant), and many many of my friends had their first, second, third children at 36, 38, 40, 42, 44. Only a small percentage of them used fertility treatments or IVF. But that’s anecdotal. On the flip side, I have one child and am 41. If I could go back to my 38-year old self and tell her to start trying for #2, I would have. Instead, I waited until almost 40. A year and a half and 3 lost pregnancies, and Ive decided that I’m done. (Or, my body has. I am not interested in fertility treatments.)

    I also think you can still live frugally if you have your children earlier. Personally, I think 30 is perfect and not “old” at all (30 and 33, great!) An advantage to having kids when you are poor is that if you do it right, the expectations are lower. You’re poor, your friends are poor, you trade hand-me-downs, etc. At my age, my friends are paying for piano lessons and karate, sending their kids to private school, etc., whereas we’re still using hand-me-downs (when we can find them), and taking him to the park.

  10. When you watch your kids graduate from high school everyone will think you are the grandma and grandpa.

    • Really? That totally depends on where you live, I guess. Maybe in my home town (then again, rural/hard living means people who are 40 often look 50 or 60 anyway).

      But where I live now? It’s the opposite. If you have your kids young, then your parents will be mistaken for your kids’ parents. My son has a friend in school whose parents were 23 when he was born. In contrast, we were 13 and 15 years older. This boy’s grandmother is only a few years older than we are, and I thought she was an aunt.

  11. What a lousy idea. The longer you wait to have children the higher the risk for all sorts of problems with the pregnancy and developmental problems for the child.

  12. Thanks for the comments everyone!

    How interesting that it turned into a fertility discussion. I must admit I hadn’t considered that factor much when using 30 as a target age for partial retirement. In fact, I didn’t even know it was possible to have kids under 30 – my wife and I still felt like we were just out of school and definitely not ready for parenthood yet. Note that maintaining excellent health is a big factor in extending your fertility as well.

    @Popeye – your comment was very significant – the misconception that $15-25k per person is a small amount of living money is pretty widespread among the upper-middle class. It still buys a very nice lifestyle. Our family of 3 now lives a first-class life on $25k or so per year total, in a paid-off $400k house, with 2 vehicles, and plenty of travel and great (cooked-at-home) food. We could probably cut it in half again if we went to a truly frugal lifestyle

    @Philly – as for children’s needs in private school and special instruction: I do imagine things like that can happen, perhaps you have first-hand experience. As retired parents, we have much more time to help the kid out with anything he needs, which working parents might have to outsource. And, our savings and investment plan has a very large built-in safety margin, so any unexpected expenses can of course be covered. At this point we mainly continue a frugal lifestyle because it is more meaningful for its own sake, not because we can’t afford to spend more. If I inherited $3m tomorrow, my spending would probably not change at all!

  13. Reading your comments was enlightening. You have a story that is not common- the ability to save a great deal of money AND find a way of making enough off that money to live in retirement. I do applaud you for taking the time to raise your child well.
    I would be curious about your investment vehicles. We are struggling with our retirement because we cannot find ways to grow our money without huge risk. Do you work part time- gaining an “after retirement” income? Our taxes and insurance alone are about 10K a year on our 400K house and two cars. Are you in an extremely low property tax state? We always had one person at home when our kids were with us (birth to college) so we were late in the savings game.
    I brought up the fertility thing because so many of my nephews and nieces are waiting–to get married and have children. They are well into their 30s. I am concerned they will never have the family they desire because we busy trying to gain enough money. BUT none of them live a life like your frugal side either.

    • Ditto about not being able to grow investment vehicles. I have tried subscribing to several financial publications and invested in the stock market, and found that leaving the money in a good mutual fund, or in blue chip stocks that payed dividends (reinvesting the dividends) was better. As an example, I like no load Fund X, Conoco Phillips and AT and T. If you have these in a Roth account you will never have to pay taxes on the gains.

  14. Wow! I’m kind of shocked that some of you think waiting until you are 30 is a big fertility problem. We waited until then and then we easily had two sons.

    Does anybody see the benefit of waiting so that

    1) You are more mature and as a result will be a better parent?

    2) Assuming you follow Mr. Moneymustache’s advice and retire, is there a benefit to the children when both parents to be able to spend significant time with their children?

    • I completely agree. We had our children in our 30s and both felt we were more mature but perhaps most importantly, we were very comfortable. We were able to deal with the normal challenges of having a new baby without financial challenges. I cannot imagine having had children and worrying about how to pay for everything on top of it all.

      We were also established in our careers so we’re in a better place professionally as well. We’ve had years to prove ourselves and now get to reap the benefits.

  15. I’m not really sure there are that many fertility problems at 30 anymore, especially if you are healthy and eat well. We had our first daughter when I was 28. Also, by that time the only debt we had was a mortgage – we’d already paid of the credit cards from college, student debt, car loans, etc. I could not imagine starting a family with all that over your head.

  16. There isn’t really a lot new here. Save and live below your means. That’s it. All they did was delay having children.

    Not really ground breaking stuff. Heck, they still work part time and from the article, have no plans on ever fully retiring.

    As far as costs go: My family of four survives on 36k a year, which allows for about 5k of savings. The whole thing hinges on having a fairly high income. The median income for an American over 25 is about 35k.

  17. Nice concept short on the details. You are talking about a world where two people can get jobs making 50k a year each out of college in a time when many college graduates are stuck working minimum wage part time random scheduled jobs due to a failing economy and the baby boom generation refusing to retire to make room for the new workers.

    Many of the places where you could live on 25k a year right now you would be hard pressed to find a job that paid that much. Or you would be hard pressed to find an apartment cheap enough in a place where you could get the job.

  18. Very interesting article! Sometimes you have kids by accident. My husband and I got pregnant right out of college as a surprise.
    People seem to have very strong feelings about having kids older or younger. I was 21 and my husband when my son was born, it wasn’t ideal, but I’m doing what I need to do. We are pretty poor b/c we weren’t established when we got pregnant, but I feel that has led me to seek out vehicles for frugality like this blog. I have now developed a healthy frugal attitude towards money at 26 and have no consumer debt to boot. If we had waited, we might be like the rest with debt spending, etc. So, different strokes right?

  19. My wife and I “waited” until we were in our mid 40s to have a child. After several years of failed attempts on our own, then expensive fertility tests and failed doctor-assisted attempts, and finally a couple of failed attempts at domestic adoption, we opted for international adoption. So while we had every intent of becoming parents in our early 30s, we brought our son home from Russia a little over 3 years ago.

    I’m 5 years away from retirement and have no house or car payments. I’m socking away madly for college funds so that shouldn’t be an issue by the time he gets there.

  20. I think that infertility can happen at any age. Unfortunately you won’t know if you will have infertility issues until you actually start trying.

    It is devastating news to the couple when they find out they have infertility issues. I think it just hits people harder if they wait until later in life to have children then find out in their late 30s/40 they have problem conceiving/miscarriages. You have less choices/options/time when you are in your late 30s/40, than you do earlier. Even the option of adoption can be based on your age. When you have all the plan in place, you start doubting if you made a big mistake in waiting, maybe you should have started earlier.

    No one has a crystal ball, even a perfectly healthy couple could have infertility issue and not know it. Plus, the pressure/stress of trying to conceive (if you wanted them) become greater as you get older.

    Of course for people who have never had infertility issues this would be a non issue, and they will no be able to relate.

  21. These comments are very telling about the demographics of Frugal Dad’s readership. I’m stunned that so many think waiting until your 30s means fertility issues. I gave birth in a northern Virginia (suburb of DC) hospital where the AVERAGE maternal age is 34. The population is highly educated and affluant.

    Interesting article though would be interested to see how this approach has worked for them when they’re in their 70s and 80s.

  22. Very interesting article…especially since it really borders on reality for me. I dont have any children yet, nor am I planning on it soon, but rather the description of my early 20’s through 30. I bought the car, rented the place, spent a ton of money going out to eat etc., and still had credit cards and student loans kicking around. Now im 30, live alone, make over 100k a year, but definitely approaching having my GF move in, and ive been more financially responsible these days.

  23. Just a thought on the decision to have only one child (from someone who has none by choice). When it comes time to deal with aging parent issues, little mustache will sorely wish he had at least one sibling. I work with a couple of only children in their mid-thirtes, and they would give anything for some siblings. I do realize that sometimes having an only child is not a matter of choice, but if it is, you would be doing your child a great kindness to give him a brother or sister.

  24. Remember, author’s writing this to the recent college grads. If you’re past that, you have to make modifications to achieve what the author’s posted.

    Maybe you can save early and have a parent or two stay home until kids are school age and go back to work force after that. In that case, you don’t have to sacrifice waiting past 35. Or save early on, have a kid at 30, then one parent can stay home while you both can achieve early retirement. Or have both parents work part time after kids are born so you both can have semi-early retirement. Different options work for different people.

    For us, we don’t like to live an extremely frugal lifestyle so prefer to work a bit longer. Even though we can early retire right now at frugal lifestyle, we don’t like to live that way. My wife will be staying home until kids (2 kids) are two and sending them to pre-school. My wife works part time so they don’t stay there too long. Planning to do that when kids are going to school so she can pick them up. For me, I can choose a job that pays more but comes with extra work/stress. I chose the 40 hrs/week and less responsiblity job that pays less. I’ll do this until I’m 40 and maybe work part time. Different options work for different people, however, if you didn’t save early, you don’t really have options.

  25. I love this idea – and in theory it would work great.

    But my DH and I have been in school through most of our 20s – I did work for two years in “the real world” and we saved what I made so that we could put down 20% on a house, pay for our wedding in full, and pay for my going back to school in full.

    But out of 10 years, working for 2 at a “real salary” means that when we hit 30, we’ll just be graduating with our PhDs. So how would your plan work for us? Even if we saved everything and still lived on the $30k (your suggested amount from above), in 8 years I would be 38 – a much riskier age to have kids. Now, in our case, we don’t want children. But even saving for retirement, I doubt we could retire after only working 8 years!

    And with taxes only going up, chances are that $25-30k isn’t going to do much – now, if that’s what you are living on AFTER taxes, that a little better, but still fairly low for a “Rest of your life” value. What about taking the kid on vacations? Or doing nice trips for yourself? What about health insurance as you age? Without a job, you must have to pay your own health insurance?

    I like the idea in theory but I don’t think it would work for anyone who doesn’t get out of school before 30 – and that’s a growing number of people.

  26. This advise is really only practical if you and your spouse have a combined income well above $50K, probably $100K or more would be better since getting a bachelor’s will typically have you getting a job at 22 to 23 years old. Otherwise, if you are both only making around $40K, and spending at least $20K to live and losing another $12K to taxes, $80-100K isn’t going to let you “retire” and raise kids off that income when you’re hitting 30. Not a bad idea if you are in that situation though.

  27. Real wealth to my wife and I means having a large, beautiful family to share our lives with. We turn 35 this year. We will be retired in just 9 years. At that time, ALL of our kids will be in college or otherwise out of the home and we’ll still be young enough to take trips and enjoy the wealth we’ve worked for. I have seen many of these “late in life” parents. We have friends who went this route. All of them admit to being a bit jealous of our situation. I can’t imagine being in my 50’s and still worrying about teenagers and raising kids. At that age my kids will be getting married and having families of their own — and we’ll still be young enough to enjoy all of that and be a meaningful part of our grandchildren’s lives. I wouldn’t have it any other way. I think a lot of you are missing the point of what real wealth is and is not.

  28. Congratulations on making early retirement work! It’ll be a lot harder if marriage and children happen in the 20s though. Still at least some of your methods are worth adopting even if kids come early.

    Living beneath your means and saving faithfully will get you there, even if it will take longer with kids in tow early. Plowing money into retirement and non-retirement accounts religiously even if it’s not in time to retire before you’re first born will still be worth it in the long run.

  29. Sorry to those of you who think that people are being ‘scared’ that fertility becomes a problem after 30. Can’t change the statistics that your chances are much worse after 35. Sure, lots of people have a child after the age of 35. Let me make that clear – ‘a child.’ If you were planning on a big family and waiting like that, you’ve been warned.

    Does it seem fair? You worked like crazy to get your degree, you were wise with your spending, you used birth control like crazy, you finally get to reward yourself and start that big family you always wanted. Except that you may not.

    And ‘no,’ it is totally not fair.

    And when you think about how many kids you want, watch Idiocracy. I’m a pediatrician and I rarely find parents with college educations with 3-6 kids. I regularly see 25 year old high school drop-outs with 6 kids living on welfare though . . .

    • Also when you start younger and find that you do have infertility, you have the luxury of figuring out what is actually long and trying solutions that take months but do fix the problem. When you’re older, you move to expensive methods such as IVF (with sperm washing) sooner. 30 is still pretty young, but at 35-38 doctors put you on a fast track once you’re known to be infertile.

  30. Money Mustache

    Very beautifully written article. I realized this when i entered my 30s. Now I am waiting to retire at 40 and this principal of saving early applies to entire world.