No Heirs, No House: The Renters Set on Spending Their Wealth

Diane Ly was living in Maine when a family emergency pulled her to Southern California. But without kids or a mortgage, what could have been an exhausting move was a relatively seamless pivot.

“Had I owned my house or had a mortgage to pay, it would have made things a lot more complicated,” she tells Realtor.com®.

“Being able to just say, ‘Hey, I need my lease to end,’ and then picking up and going was very beneficial for me.”

It’s a scenario that runs counter to the playbook most American families have followed for decades—one that focused on investing in a home, riding appreciation, and passing the asset on to the next generation. 

Baked into that playbook is a compelling calculus: Purchasing a home by age 32 results in a net worth of roughly 22.5% higher than if you’d waited to buy in your 40s, and a net worth of 38 times that of a renter, according to new research from Realtor.com.

But as more adults opt out of parenthood and focus their financial planning around flexibility that ends with them, that premise is coming into question.

“Everything about financial planning is based on the standard life script,” explains Jay Zigmont, a certified financial planner and founder of Childfree Wealth, a firm that provides wealth and estate planning advice to child-free people. Remove children from the conversation, he says, and “it changes just about everything.”

That’s why, for a growing class of child-free people like Ly, return on investment isn’t measured in net worth. Instead, it's measured in flexibility and liquidity—values that often make renting the smarter fit.

The American wealth script was built for direct-decendants

The U.S. fertility rate hit a historic low in 2023, as a growing number of women between the ages of 25 and 44 have never given birth, according to Pew Research.

While these trends have received ample airtime, coverage often focuses on the cultural implications or how an aging population might bankrupt Social Security. 

Zigmont points to a deeper shift.

“That standard life script is also the American dream,” he says. And the most loaded part of that dream for child-free people, he argues, is that the home you buy today is meant to become someone else’s windfall later.

“The investing thesis around real estate has built in an assumption that you’re going to pass on to the next generation,” he says.

It’s even baked into the tax code. 

Today, 1 in 3 homeowners have built up more home equity than the capital gains tax exclusion for single filers protects when selling a primary home. By 2030, that number is expected to rise to nearly 56%.

Heirs, on the other hand, benefit from a stepped-up cost basis when they inherit a home. The stepped-up basis resets the clock, allowing them to measure any gains or losses against the price of the home at the time they inherited.

Even more blatantly, in some states, inheritance taxes favor direct heirs over indirect heirs. In Pennsylvania, for example, surviving spouses and parents are exempt from the state’s inheritance tax. While children over the age of 21 must pay a 4.5% rate, and all other heirs (like nieces, nephews, friends, or cousins) pay a 15% rate.

The new questions being asked

All of this leads child-free adults to rethink how they accumulate and spend their wealth in life.

“Child-free people don’t start with a lens of, ‘Hey, how do I make an impact on the next generation?” Zigmont says. Instead, they start from a place of “‘How do I make an impact, and what does that look like?’” 

That shift reorders everything from how aggressively someone saves to what kinds of assets (like real estate) feel worth the hassle.

Dr. Amy Blackstone, a sociologist who wrote a foundational book on child-free adults and is child-free herself, puts that shift in a broader context.  

“It’s not as easy for a Gen Z as it was for my generation and my parents' generation to buy a house or to be able to afford to have a kid,” she says. 

And as those pathways narrow, while some people are opting out, Blackstone believes others are being priced out.

Either way, the financial questions are converging on the zeitgeist. An estimated $124 trillion will transfer from one generation to the next by 2048 in what’s being dubbed The Great Wealth Transfer, with an estimated $25 trillion in real estate alone, according to Federal Reserve data.

But Zigmont says that transfer is running headlong into an American retirement system that leans on an assumption that doesn’t hold for many child-free adults—and increasingly, for plenty of parents, too.

“The entire system around long-term care has an assumption that you have family members to take care of you,” he says. “That assumption is just not true.”

In his work, he routinely runs clients through the cost of paid care, which can cost upward of $129,000 per year, according to Care Scout, a firm that helps families find and fund long-term care.

Child-free couples often bear the burden of caring for aging parents while simultaneously needing to save for their own late-life care without children to rely on.

That’s why he often advises his child-free clients to rent. Home equity can be harder to tap—only available via home sale or a loan leveraged against it—while 401(k), IRAs, and other investment vehicles can offer more liquidity.

No direct heirs doesn’t mean no legacy

It’s tempting to read the rise of child-free adulthood as a lifestyle story: People choosing freedom over mortgages, travel over nurseries, flexibility over permanence.

But Blackstone cautions against that framing. “I have heard that as a stereotype of child-free people,” she says. “The stereotype about child free people being selfish.”

In her work, Blackstone has had the privilege of extensive interviews with people opting into a child-free life. She says in those conversations she’s noticed what she describes as “a much broader, more diverse understanding of what legacy means.”

She’s seen people establish estate plans to support friends, extended family, and vulnerable people in their orbit—often with a level of intention that looks a lot like the old family wealth playbook, just pointed in a different direction. 

“[Child-free people] are taking great care to leave financial legacy for people in their lives,” she says, whether they’re blood relatives or not.

For Ly, legacy is more of a present-tense practice. Without the pressure to buy or preserve a house, she says she’s directed more of her resources outward.

“I am more able to give freely to certain causes, people in need or communities in need, because I don't have anyone depending on me financially,” she says. “I have had the privilege of being able to give a lot and not feel squeezed.”

“Buying property was an option, and it still remains an option,” she says, highlighting the stability it offers. “But I feel like I didn't need to follow such a script of how things go in life.”