Empty Nester Guide – Financial Tips (Part 2)

Welcome to Part 2 of our Empty Nester Guide – Financial Tips.  From my experience, these Financial Tips take longer to evaluate and possibly more time to implement than the “Fun” tips shared in Part 1.  They are all worthy of consideration, and, while some of them are in your control, some of them are more about awareness and happen whether you want them to or not.

Financial Tips

1. Revise the Budget – I think, if you are a parent, you know this from experience. Kids are expensive!  There are many things that reveal themselves to be significantly cheaper when the kids are out of the picture – food, transportation, entertainment just to name a few.  This makes it the ideal time to review and adjust your budget and make a plan for that “new discretionary income.”  You could put those savings towards dining, leisure, travel, savings, and/or investments.  My advice is to be intentional about it.  This is your ship again, and it’s time to intentionally set sail.
2. Remember Uncle Sam – This one can sneak up on you. It’s important to prepare for the tax impact of losing dependents on your tax return.  You will likely owe slightly more at tax time, so plan ahead and consider contributing to a tax-advantaged retirement plan to help offset the increase.
3. Consider Downsizing – I’m still evaluating this one. I’m not quite sure.  I think it takes time to live in your “new” surroundings to determine if you have too much space and how to handle it.  Depending on the stage of your empty nest, you may want to see what happens with Tip #5 below first.  There’s also the grandchildren effect which may make you want to move closer to your adult children if they have moved out of the area.  It’s hard to tell at first and takes time to consider.  Only you know what will work best for you.
4. Structure Your Days – Sometimes an empty nest can make you feel … well … empty. Structuring your days and/or nights can be a key way to avoid “feeling purposeless.” I like keeping a bit of a to-do list with goals in mind, while always leaving the chance for a bit of spontaneity.  It’s not a strict structure after all; it’s more of a guideline.  It’s always best to leave room to accept a last-minute invite for evening drinks or a movie with friends.
5. Plan for a ‘Boomerang’ – Just when you think you’re all set, I offer one little spoiler and that is, once an empty nester doesn’t mean always an empty nester. The pandemic proved this in dramatic fashion as well as the all new “working from home” rage.   Your kids may graduate, get a job, and then be able to “work from home” (i.e. rent free in your home).  Yikes!  Don’t downsize too soon.  Heh!  That said, more than likely the kids will eventually move out permanently and your empty nest will return.  So, depending on your empty nester stage, it’s a good idea to factor the Boomerang into your retirement plan and budget to proactively determine how much support you are willing to provide and for how long.

I hope you enjoy this light-hearted Empty Nester Guide and it helps you navigate this exciting phase with joy.  Again, Virtus Wealth Management is here to help you through all of the phases of your life.  We believe your life is full circle, and your wealth management should be too.

The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.