Financial Advice for Empty Nesters

Jul 28, 2023 2 min read

When your last child leaves home, it can bring about mixed emotions, a state commonly known as Empty Nest Syndrome. You might beam with pride thinking of your kid’s achievements, but you might also feel unsure about how to transition to an empty nest. You might even feel excited about finding purpose as an empty nester or about experiencing one-on-one adventures with your spouse or partner.

Whether you’re excited for this new era in your life or a bit uneasy about what’s next, the empty nest offers an opportunity to take a fresh look at your finances. Your financial picture will change significantly when your kids are no longer living at home — use these tips for empty nesters and learn how to make the most of it.

Create a New Budget

With fewer people living under your roof, your grocery and utility bills are likely to decrease. Track your spending habits carefully for three months to see how much you’re saving, and then put the difference towards paying down debt or beefing up your savings. This is also a good time to take stock of any digital subscriptions and data plans, some of which may no longer be necessary.

Even if you’re still providing some financial support to your child over the next few years, you may see opportunities for a more flexible budget and find ways to treat yourself.

Review Your Taxes

If your young adult children are still full-time students, you can claim them as dependents on your tax return up to the age of 24. Otherwise, you can only claim children who are 19 or younger by the tax year's end. Once your children are no longer dependents, look for other tax deductions to recoup the savings. A tax professional can help identify other ways to save.1

Examine Your Life Insurance Policies 

If you previously purchased term life insurance in order to provide for your kids until they were grown, this is a good time to reevaluate your life insurance needs. If you no longer have any dependents relying on you financially, you may be able to reallocate those funds.    

Beef Up Your Retirement Accounts

After years of investing in your kids, this is the time to go all in on your own future by putting extra money toward your 401(k), IRA or other retirement investments. Take advantage of catch-up contributions, which allow people ages 50 and up to put extra money into their retirement plans. Beginning in 2025, people ages 60 to 63 will be able to make even bigger catch-up contributions.

Evaluate Your Living Space

Once the kids have flown the coop, the four bedrooms, two ovens and large laundry room may go from necessary to burdensome, as more house means more upkeep and expense. Even if you’ve paid off your mortgage on the family home, you could still be paying a hefty sum in property taxes, homeowners insurance, utilities and maintenance, all of which are higher for a larger home. Some empty nesters opt to downsize to a smaller house once their children are out of the home.

Alternatively, one of the most important downsizing tips for empty nesters is to look at each room in your home with new eyes and free up previously kid-designated hangout spaces for indulging in your own hobbies. If you’ve kept a study nook for your children for example, perhaps it can now be your yoga or meditation spot.

Make Time for Yourself

Raising kids sometimes involves sacrificing your own needs and wants. But now’s the time for finding yourself as an empty nester. Likely, you’ve changed in the last 18-plus years. What interests you? Have you always wanted to train for a marathon but never had the time? Is there a creative hobby you’ve been wanting to try?

Take time to think about what makes you happy, what excites you and what things in your life you’d like to change. Reinventing yourself as an empty nester doesn’t mean you need to become a new person. Instead, don’t be afraid to try new things, set ambitious goals and build a life you enjoy — even if you have to step out of your comfort zone.

We Can Help With Life’s Changes

As your life changes, your insurance needs may change, too. Talk to your local Farm Bureau agent today to make sure you have the coverage you need.

1. Neither the Company nor its agents or advisors give tax, accounting or legal advice. Consult your professional advisor in these areas.

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