Family How Parents Approach Financial Life as Empty Nesters

by Stacy Suaya | April 12, 2019

When kids leave home to embark on their adult lives, it kicks up emotions — and questions — for parents.

The biggest: What do I want to do with my life now?

Will you spend less time working and more time traveling? Reposition your career? Take up a new hobby? Carefully considering what you want to do in this next stage of life is important. And, just as crucial, is how to budget for it.

You may (reasonably) assume that, with no dependents under your roof, your finances will free up. “But there’s not always some sudden windfall when the kids leave. In some cases, it’s quite the opposite,” cautions Dan Grote, a certified financial planner in Denver, CO, with clients entering this exciting, but unfamiliar, new chapter.

Last year, Life and Money by Citi shared the stories of families and the rainbow of feelings they experienced when approaching this transitional stage. So, how are those parents, and others like them, continuing to cope with their new normal? And, more specifically, how have they faced questions about career, retirement and financial planning to determine what's next?

Adjusting to the quiet

Jennifer Oliver, a 47-year-old director of human resources in Charlottesville, VA, sent her daughter, the youngest of her two children, off to college in August. Jennifer reports that she and her husband, Carey, have adjusted to the quiet. But, they've also kept busy at home by looking for ways to save on bills, reduce clutter and reclaim their space.

They cut out cable in favor of less expensive alternatives. They cleared out toys, clothing, sports equipment and donated household items they no longer needed. And they renovated their basement, a former a hangout space for the children, to make it a more functional room.

As for the larger financial picture, the Olivers are glad that they had proactively set up 529 college education funds when their children were in middle school. However, with the plan now depleted and the balance of two tuitions to pay, Jennifer says finances have simply shifted to other places.

Make a retirement plan

So, can we retire yet? This might appear to be a natural next step once the kids have moved on, but there is no set timeline for this stage.

As for the Olivers, Jennifer has a defined benefit retirement plan, so she plans to continue working and maximize her employers’ contributions. This puts her on track to retire comfortably in 13 years, and her husband Carey is planning to retire two years after her. Rather than punch out for good, Jennifer imagines that she’ll make a career change. “I might want to work for myself or help other people,” Jennifer muses.

To make sure they're both able to reach these goals, the couple has met with financial advisors to concentrate on various retirement saving strategies. “Strategies for social security and pension maximization are important to consider for couples heading into retirement,” Grote advises. “The right strategy could literally save couples hundreds of thousands of dollars — and, unless you plan, most people don’t understand this.”

The right strategy could literally save couples hundreds of thousands of dollars.
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Commit to reconnecting

One thing the Olivers did plan for with the kids gone was to strengthen their bond as a couple. It looks different than in their early days as a couple, but it's still about carving out time for one another. Nowadays, that might mean getting equal phone time with the kids, and discussing how that feels after speaking with them. They plan to rent an RV and explore the Shenandoah Mountains. They’re also looking forward to a beach vacation this summer — potentially as a family. However, they're prepared for the reality that their kids are young adults with their own lives now and may not join.

Many families find that when day-to-day contact changes, so does the way they keep in touch. Jennifer maintains what she calls “medium space” with her children. She takes a temperature check to see if she’s calling too much, and has found that sending a “hope you’re having a good day” text is a less intrusive way to show support. Jennifer resists pressing them for their grades, so is even more thrilled when they call her to say, “I got an A!”

Jennifer is also making an effort to reach out to her community. She's connecting for coffee with friends to find support and new projects. She plans to get more involved at church where she volunteered for 10 years, and she's looking to rejoin the board of her local Society for Human Resource Management chapter.

Happy older couple embracing as they walk though a green field

Finding a second wind

Just as every family is unique, so is the transition to this next phase. Take, for example, Christine and Rod Cleveland of Norman, OK, who have been married 31 years and have four children. Their youngest child left home two years ago, but the loss didn’t hit Christine right away because he attended a state university in their town. However, the reality of their departure sunk in about six months ago when their two sons moved to Texas.

“I cried and I’ve been through it,” she says, but now she's eager to talk about her resurgence. “Empty nesters need to dream even bigger than they did in their twenties,” she says. Christine believes that her generation can add more value than the one before it due to the time and energy freed up by not having kids in the house.

Christine, a beauty sales entrepreneur, is using her time to exercise, eat more healthfully and read leadership books to better guide her team at work. “I don’t want to deteriorate,” she says.

After years spent caring for others, a renewed interest in one's health is a positive way to refocus energy. Grote points out that the same focus should be applied to health-related financial planning, too. For example, becoming an empty nester should trigger one to look at long-term care insurance, he says, particularly since the cost goes up each year for two reasons: the increase in age and value of the monthly benefit.

Strengthen bonds

Christine's positive outlook also extends to her marriage. She thinks the relationship is easier now than when they were young, and Rod agrees. He partly credits their success to pre-marital counseling and ongoing marriage counseling through their church. The couple has long believed that in order to raise happy children, their marriage should be top priority.

“It’s not a bad idea for couples to have a marriage counselor on speed dial during this stage,” Grote says. “Empty nesting can put marriages under new stress. Tuition bills and related expenses are coming in and, at the same time, the children are asking for parental support for rent, groceries and entertainment.”

The Cleveland family stays connected through a group chat, titled “Team Cleveland,” where one daughter might post photos of her new baby or the other might post what she baked that day. And, Christine plans to keep their season tickets to their hometown university football team games as an open invitation for the entire family. “I think if parents find a common love with their adult kids then they can keep making priceless memories,” she says.

Stay motivated

Like the Olivers, not much has changed financially for the Clevelands due to having several kids in college at the same time, but their motivation hasn’t slowed. “I wish we would have done a better job financially planning,” Rod admits. “I wish we would have seen more windfalls. My advice to others would be to plan in your thirties, and in your fifties you’ll really appreciate it. Luckily, Christine and I are still active and learning."

Christine thinks about selling their home and running her business out of a smaller beach house. Rod is considering getting his master's degree in public administration, and he wants to turn his home-construction hobby into an income stream.

After years spent caring for others, a renewed interest in one's health is a positive way to refocus energy.
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Savvy strategies for empty-nest success

1. Make a financial plan

Everyone should consider making a financial plan as early as possible, and adjust your plan as household finances shift. “If empty nesting does free up cash, don’t spend it all on dinner out at steak houses or on weekend ski passes instead of having a plan that puts you on-target for retirement,” says Grote.

2. Downsize carefully

When downsizing in square footage, it’s easy to spend the difference on adding extras into a new home — avoid this common pitfall by determining what's necessary or what's a nice-to-have.

3. Invest with confidence

If you’re behind on your retirement goals, don’t try to overcompensate by investing aggressively. “Your investments need to match the psychological you,” says Grote. “We can only handle so much loss, which is possible when markets don’t perform.” Grote also suggests using this time to check in with your retirement accounts, and reallocate your investments to protect the money you have now, and best position you for your later years.

4. Let your kids fly

Kids may boomerang back to ask for money periodically, so have a plan to cut the financial cord. “Try to notice if it is affecting your mental and financial health, and whether you’re actually helping the caterpillar come out of the cocoon,” says Grote.

With a solid plan, you can cheer your kids on while enjoying your own new chapter — and don’t be surprised if you find out they’re also cheering for you.

Woman and 3 men doing yoga in a field
Stacy Suaya

has two boys in preschool, but is already planning for college. The Los Angeles-based writer’s work has appeared in The New York Times Styles, The New York Times T Magazine, Los Angeles Times, C Magazine and Robb Report.