Planning for What’s Next: Smart Finances for Empty Nesters

As children grow up and move out, many parents find themselves at a crossroads—proud of their kids’ independence, yet facing a new chapter filled with both opportunity and uncertainty. This “empty nester” stage brings more freedom—personally and financially—but it also raises important questions about what’s next. With shifting goals and evolving priorities, a strong financial plan becomes essential to help ensure lasting security and the flexibility to make the most of this new phase of life.

Shifting Financial Priorities:

The empty nester phase marks a significant shift in financial priorities. After years of focusing on raising children, covering education costs, and managing household expenses, parents often find themselves with extra disposable income. However, this doesn’t mean that financial planning takes a backseat. On the contrary, it's a crucial time to reassess long-term goals and reallocate resources toward retirement, health care, and other future needs.

Maximizing Retirement Savings:

With fewer immediate financial obligations, empty nesters can take advantage of the opportunity to maximize retirement contributions. Whether through employer-sponsored plans, IRAs, or other investment vehicles, increasing contributions during this time may help fill any gaps in savings. Catch-up contributions, available to individuals over the age of 50, allow for an additional boost to retirement accounts.

Downsizing and Home Equity:

For many empty nesters, the family home becomes larger than necessary once the kids move out. Downsizing to a smaller home can be a smart financial move, reducing maintenance and utility costs while freeing up home equity. This additional equity can be used to bolster retirement savings or for other financial goals. An Oppenheimer financial professional can help evaluate the potential benefits of downsizing and guide you through the decision-making process.

Health Care and Long-Term Care Planning:

As you approach retirement age, health care costs become a growing concern. Having a financial plan in place helps ensure that you’re prepared for the rising costs of medical care, insurance premiums, and potential long-term care needs. Long-term care insurance, Medicare planning, and health savings accounts (HSAs) can all play a role in protecting your financial well-being as you age.

Estate Planning and Legacy Goals:

Empty nesters often begin thinking more seriously about their estate plans and legacy goals. This phase of life is an ideal time to revisit wills, trusts, and beneficiary designations to ensure they reflect current wishes and family circumstances. A comprehensive estate plan can help minimize tax liabilities and ensure that assets are distributed according to your intentions, while also providing confidence for both you and your loved ones.

Supporting Adult Children:

While children may have moved out, many parents continue to provide financial support for their adult children, whether through gifts, help with student loans, or assistance with home purchases. A financial plan can help you determine how much you can comfortably provide without jeopardizing your own retirement security. It's important to set clear boundaries and prioritize your own financial needs while still offering support when appropriate.

The empty nester stage marks a pivotal transition that comes with both challenges and exciting possibilities. With a well-crafted financial plan, this new chapter can be approached with clarity and confidence. From maximizing retirement savings to adjusting spending and preparing for long-term care, proactive planning empowers empty nesters to make the most of their newfound freedom while securing a strong financial future.

Speak with an Oppenheimer Financial Professional today to learn more.