Data Shows That DINKs Have More Retirement Savings Than Couples With Kids. Here’s How to Catch Up as a Parent

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It’s not surprising that dual-income couples without kids have more long-term savings than those with children. Read on for ways to catch up. 

When I told a friend of mine who doesn’t have kids that I spend over $500 a month on my children’s extracurricular activities alone, her initial response was, “Wow, there’s no way I could afford that.” And it’s not the first time I’ve heard things along those lines.

Raising children is expensive, even when you happen to be part of a dual-income household. And my husband and I make a lot of sacrifices to allow our kids to participate in the sports and activities that are important to them.

On my end, for example, I commonly return to my desk to work late at night once my kids have gone to their rooms to drum up extra income. Would I rather be relaxing on the couch with a book and a warm cup of tea? Sure. But putting in those extra hours helps ensure I’m able to keep saving money despite the high cost of raising kids.

Not surprisingly, though, data from Rocket Mortgage shows that DINKS — dual income, no kid households — are managing to save more for retirement than dual-income households with children. And while the disparity isn’t so great on a national scale, in some parts of the country, it’s significant.

No kids, more savings

Dual-income households without kids earn an average of $138,000 per year, which is nearly 7% more than the average $129,000 income among dual-income families with kids. That alone could explain why they’re able to save a bit more.

Overall, the savings gap between DINKS and dual-income households with kids isn’t huge. Nationally, DINKS save 9% more for retirement, or about $4,800 per year in total, versus $4,400 per year for dual-income couples with kids. But in some parts of the country, that gap is wider.

In Connecticut, for example, DINKS save an average of $15,900 per year, compared to $3,100 per year for dual-income households with kids. In South Dakota, DINKS save an average of $6,200 per year, compared to $2,900 per year for dual-income couples with children.

How to catch up to DINKs

If you have children, it means you’re paying for a host of expenses that households without children aren’t. So it’s easy to see why your IRA or 401(k) balance might be lower. But it’s also important to do what you can to catch up to DINKs. After all, you’re entitled to a comfortable retirement, too.

One easy way to boost your retirement savings is to put the process on autopilot if you have an IRA. IRAs aren’t funded with payroll deductions the same way 401(k) contributions are. If you set up an automatic transfer out of your checking account into your IRA each month, you may be more likely to meet your savings target.

But also, you may need to cut back on some of your child-related expenses. This doesn’t mean you shouldn’t feed your kids or take them to the doctor when they feel sick. Rather, it means setting priorities so you can free up more money for your long-term savings.

Rather than say yes to every sport or activity your kids want to do, say yes to just one or two. That’s a system we employ in my household.

Each child of mine has a limit of two higher-cost activities at any given time. I’m more flexible with activities that are inexpensive — for example, a recreation program that costs $100 for the entire three-month season.

Another thing I do is spend minimally on clothing. Kids have a tendency to outgrow clothing items really quickly. So I make a point to find the cheapest pants and shirts I can, whether by hitting up Costco or stalking Amazon for sales.

I also make it known that I’m happy to accept hand-me-downs from friends with older kids. That’s saved me hundreds of dollars on clothing through the years.

It’s not at all surprising that DINKs have higher retirement savings balances than dual earners who are raising children. But if you want to put yourself in a position to save just as much as your contemporaries without kids, then you may need to set some ground rules and stick to them.

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