Nurturing the Empty Nest

Tip #1: Revisit Your Financial Plan

Be aware that many of the assumptions underlying your current financial plan may be obsolete. College tuition payments may be completed. You might have more living space than you need or want. You have more time to travel and pursue hobbies. Spend time thinking about what you’d like to do after the kids leave, as well as how you will fund that plan.

Tip #2: Plan for Retirement

When the kids leave, it’s a great time to straighten out your retirement plan. First, create a list of financial goals to focus on. Many empty nesters focus on paying outstanding debts, such as their mortgage, to reduce monthly expenses. Others choose to increase retirement account savings before they have to start withdrawing from those accounts. Choose what makes the most sense for your scenario, then break down your finances as they currently stand. This will allow you to see where your spending can be adjusted to help you save or pay off debt.  

SEE ALSO: How to Handle Transitional Stress

Tip #3: Focus on You

After you have cared for your children for many years, an empty nest provides you with an opportunity to focus on yourself. While this can evoke feelings of discomfort, it can also lead to rediscovering the things that bring happiness beyond being a parent and caregiver. Having a plan to make these discoveries can help you feel more comfortable with your newly found free time.

A Note on ‘Boomerang Kids’

The interesting thing about today’s empty nest is that it doesn’t always remain empty. According to the Bureau of Labor Statistics, 90 percent of children have moved out of their parents’ house for at least a three-month period by the time they are 27, with a median move-out age of 19. Interestingly, 54.6 percent of those who moved out of their parents’ home later moved back in for a period of time before they were 27.

These so-called boomerang kids return home for a variety of reasons. They could be looking for work, saving money to buy a house, or finishing their education. Many of my clients have welcomed adult children back into their homes, but they often fail to think about how their expenses will need to change in doing so.

SEE ALSO: Families and Finances: Communication is Key

When you’re starting your empty nest lifestyle, consider whether you can afford to cover the cost of an extra person living under your roof again should one or more of your children choose to move back in. It’s important to determine whether you would need to charge them rent to help keep your own expenses down or to convey the message that they need to contribute to the home in which they live.

In my years working with clients, I have observed many parents who go so far as to supplement the incomes of their boomerang kids – many times to their own detriment. It can be difficult to say no or to consider asking your child to pay rent, but you need to develop a plan that works for everyone, yourself included. It could be that you agree to help your kids for a certain time period, after which your support gradually tapers off and eventually ends, or even setting a predetermined move-out date. Setting guidelines and deadlines can help your boomerang kids reconfigure their plans and understand the consequences. As much as you want to be able to help your children, doing so should not threaten your own financial security.

Final Thoughts

Life transitions can be difficult, even when they are the joyful and exciting type because they are almost always unpredictable. When it comes to preparing for and navigating the realities of an empty nest, thoughtful planning can help smooth the way for you to conquer challenges and enjoy this new phase of life. Good luck!