Financial Considerations When You Become an Empty Nester

Financial Considerations When You Become an Empty Nester Episode 336 – Being an empty nester undoubtedly creates challenges you might never have thought of. Here are some tips about what you may encounter, and how to deal with them. More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 336 Hello, this is Bill Rainaldi, with another edition of Security Mutual’s SML Planning Minute. In today’s episode, financial considerations when you become an empty nester. So, after years—perhaps decades—of focusing on your kids, you’ve finally turned a corner. The last of your children has grown up and moved out. Now what? After having invested so much of your time and energy on your children for so long, maybe now would be a good time to bring your focus back to yourself and/or your spouse. In a recent article, Susan Hirshman, a Director, Wealth Management at Charles Schwab, has some suggestions on what financial issues may now merit more of your attention.[1] Hirshman says that now would be a great time to start a new business, do some volunteer work, travel, or participate more in some of your favorite hobbies. It also might be a good idea to look at downsizing your home, something we talked about back in episode 310. It’s also a great time to reignite relationships that may have cooled while you devoted time to raising your children. Having more free time enables you to reconnect with your social network and rekindle old relationships. [2] From a financial perspective, this is probably a good opportunity to boost your savings rate if possible. With the kids gone (and hopefully supporting themselves), your expenses might go down a bit. Also, once you get past age 50, you become eligible for extra “catch up” contributions to your employer-sponsored retirement plan or IRA, including Roth equivalents.[3] So, it may be a good time to evaluate your retirement savings and see if you’re on course to achieve your goals. It’s also a great time to reexamine your expenses. Without the children at home, not only do you need less food in the house, but you also might eliminate special cable subscription services, or cut back on your full family cellphone plan, or sell that extra car in your driveway to pick up some cash and cut your car insurance bill. It’s also a great time to sell or donate some of your extra stuff, such as furniture you no longer need, and toys and books that are now just taking up space. It also might be a good idea to start looking at long-term care insurance. The federal government estimates that about 60 percent of us will eventually need help with the “activities of daily living,” or ADLs.[4] These include things like getting dressed, bathing and personal grooming, among others. A long-term care insurance policy might prove valuable. Also, certain life insurance policies may include an optional chronic illness rider. This rider makes a portion of the death benefit available to help with the costs associated with a chronic illness. Also, now might be a good time to develop a retirement spending plan. With the kids out of the house, your new spending regimen may give you a better idea of what it’s going to cost you to live in retirement. Once you have a rough approximation of what you’re going to spend, it may be a good idea to evaluate your current retirement savings situation and strategy to see if you’re on course and to refine your plans accordingly. You are likely to need the assistance of a qualified financial professional. Your Security Mutual Life insurance agent can help. He or she will assemble your team and coordinate with your attorney and tax professional to review your situation and to determine the strategy and products that will best suit your needs and objectives. At this stage in your life, perhaps one of the best things you can do is simply to embrace change. It’s understandable that you might miss your kids. But this is an exciting new phase in your life. Give yourself a chance to enjoy it! [1] Hirshman, Susan. “Retirement Planning for Empty Nesters.” Schwab.com. https://www.schwab.com/learn/story/retirement-planning-empty-nesters?cmp=em-XCU (accessed May 22, 2025). [2] Id, [3] Internal Revenue Service. “401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000.” IRS.gov. https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000 (accessed May 22, 2025). [4] Administration of Community Living. “What is Long-Term Care (LTC) and Who Needs it?” acl.gov. https://acl.gov/ltc (accessed May 22, 2025). More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information.  The information presented is designed to provide general information regarding the subject matter covered. It is not to serve at legal, tax or other financial advice related to individual situations, because each person’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. If you’ve enjoyed this podcast, tell your friends about it. And be sure to give us a five-star review. And check us out on LinkedIn, YouTube and X (formally Twitter). Thanks for listening, and we’ll talk to you next time. Tax laws are complex and subject to change. The information presented is based on current interpretation of the laws. Neither Security Mutual nor its agents are permitted to provide tax or legal advice. The applicability of any strategy discussed is dependent upon the particular facts and circumstances. Results may vary, and products and services discussed may not appropriate for all situations. Each person’s needs, objectives and financial circumstances are different, and must be reviewed and analyzed independently. We encourage individuals to seek personalized advice from a qualified Security Mutual life insurance advisor regarding their personal needs, objectives, and financial circumstances. Insurance products are issued by Security Mutual Life Insurance Company of New York, Binghamton, New York. Product availability and features may vary by state.  SubscribeApple PodcastsSpotifyAndroidPandoraby EmailTuneInDeezerRSSMore Subscribe Options