Financial Advice for Empty Nesters

Empty nesters — people whose children have grown up and left home — often are proud of their offspring’s accomplishments but uncertain about their own future. On the one hand, you might feel excited about finding purpose as an empty nester, or about experiencing one-on-one adventures with your spouse or partner. On the other hand, entering any new phase of life can be a challenge. 

Part of being an empty nester is adjusting to a new financial situation. Money management as you’re moving into this new era of life looks different from when there are kids at home.  

You might be thinking about downsizing your home, retirement savings strategies, funding your travel dreams or just finding good empty nester tax services to help you navigate your new reality. 

6 Steps to Help You Navigate 

Here are some tips for empty nesters to learn how to make the most of this exciting new phase in life. 

Step 1: Create a New Budget 

With fewer people living under your roof, your grocery and utility bills are likely to decrease. Of course, you may still be providing some financial support to your child. But without them under your roof, your budget will change. You may see opportunities for a more flexible budget and find ways to treat yourself. 

Knowing the change can help you figure out where to re-allocate those funds. Start by tracking 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 for you. 

Step 2: Review Your Tax Situation 

Your tax situation changes as your children get older.  

If your young adult children are still full-time students, you can claim them as dependents on your tax return as long as they are 24 or under.  

If they’re not full-time students, you can claim adult children as dependents as long as they’re age 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. Talk with a tax professional to help identify other ways to save.  

Step 3: 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 to other uses.   

Step 4: 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 — especially if you discovered extra money in your budget. Beginning in 2025, people ages 60 to 63 are able to make even bigger catch-up contributions. 

Step 5: 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: More house means more upkeep and expense.  

Even if you’ve paid off your mortgage on the family home, you may 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 have moved out. 

You may also want to repurpose space that once was designated for kids, using it for your own hobbies. A study nook for your children might now be your yoga or meditation spot. A former gaming room might now be a craft den. 

Step 6: Make Time for Yourself

Every parent knows that raising a family means sacrificing your own needs and wants. But you’ve put in the time, and now is when you get to find yourself again. 

You’ve likely 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? What’s a travel destination you’ve always longed to visit? 

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 a little. 

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.