Knowledge and Insights

Empty Nest? It’s Time for a Financial Update!


It is inevitable that your kids will grow up and someday move out of your house.  Life will no longer revolve around their schedules.  This can be a difficult emotional transition as you move into the next phase in life as an empty nester.  After you deal with the emotional aspect of the lifestyle change, it is time to think about what to do with all the extra time and other resources including money!

Now that you are done paying for piano, karate, sports lessons and college, your pocketbook may feel a little heavier.  It is a good time to reevaluate your spending plan to determine areas in which you will free up money and where those extra resources can be most useful in your overall financial picture.

Rainy Day Fund

Your spending plan should have both regular monthly cost-of-living as well as long-term savings goals for emergency funds, retirement savings and big ticket items (think shiny new convertible instead of that old minivan!).

Retirement Planning

Most important: make sure your retirement saving is on track to meet financial goals to ensure you have enough money to live comfortably in retirement.  Now is a great time to max out your annual retirement savings contributions if you are not doing so already.


This is a good time to re-evaluate your insurance needs.

  • If you don’t have long-term care insurance and your financial position indicates that you may benefit from being insured, now is the time to consider redirecting some of that new excess cash flow to that purpose.
  • You should also evaluate your life insurance needs.  What made sense with young children and the future costs of raising them, may be too much coverage at this point in life.
  • Also make sure that if your kids have moved out permanently that you update your auto insurance policy to avoid paying higher premiums than necessary.
  • If they now have full time jobs, with benefits, you should sit down together and evaluate the cost or benefit of them signing up for their own medical insurance or if they should remain on your policy until they are 26 years old.  If they take their own coverage, be sure to notify your health plan provider.

Get Out of Debt

As you work on your overall financial picture, it is essential to manage your debt levels wisely, with the goal to be debt-free at retirement.  Come up with a manageable plan to minimize debt by paying off loans faster with your new-found extra cash.  This will also result in saving on the amount of interest you are paying on the loan.  Another consideration is to downsize your home, now that you do not need all the extra space.  This would mean reduced utility costs and maintenance expenses.

Update Your Estate Plan

Now that the kids are grown up, it’s a good reminder to also update your estate plan.  Your will may still refer to guardians for minors and trusts with payout terms that no longer make sense.  You are now starting to have a good feel for who your children are as adults and how they handle financial responsibilities.  You may decide that outright inheritances are not such a good idea due to either spending habits or potential future in-laws.  On the other hand, you may want to name adult children as executor or secondary executor to your spouse for your estate and list them on your health care directives.

It is also time to have fun and enjoy your hard-earned cash!  Plan and fund that dream vacation.  Purchase that big ticket item that you have been delaying because the kids’ needs were a priority. Perhaps you would like to pursue a new passion, however, you could not take the financial risk when the kids were younger. Now may be a good time to become an entrepreneur. Think about becoming more philanthropic and increase your giving to family and/or charities.

The important thing to consider is to keep learning, growing, and exploring opportunities after the kids leave the house.  Do a gut check and be sure you are in a position to support those opportunities you wish to explore. Plan for the future, but don’t forget to enjoy the present. Feel free to reach out to the Individual Services Team at Mercadien to discover how we can help you meet your financial goals.

In the meantime click here to access a handy empty nest check list to get you started!