Checklist: Preparing for an Empty Nest

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Watching your children become independent is a bittersweet process. Preparing ahead of time for an empty nest can help ease the adjustment to this new stage of your life. Here's a checklist that can help you begin to think about the financial implications. Use this when you talk with your financial advisor. Together, you can develop a strategy that will work for you as you enter this new phase of your life.

Revisit the Big Picture

  • Talk to your spouse about possible lifestyle changes you're thinking about, along with their financial impact: returning to work, changing jobs, downsizing your home, building a dream home, buying a vacation home, remodeling, traveling, etc.
  • Discuss what you may want to do in your free time – for example, hobbies, sports or volunteer work.
  • If you need to provide care for an aging parent in the near future, determine how this might impact your lifestyle and future plans.
  • Discuss possible financial resources available to meet any of these lifestyle changes.

Consider Your Finances

  • Update your monthly budget. Consider items you may not need any longer – for example, extra cell phone lines or features, extra TV channels and options, magazine subscriptions, etc.
  • Work with your children to instill good saving and spending habits, and agree with your spouse on a time frame for children to be financially independent.
  • Consider putting money you were using to support your children toward a larger financial goal, such as paying down debt, increasing mortgage payments, boosting retirement savings or making catch-up contributions.
  • Set financial boundaries for adult children regarding moving back home and borrowing from you.
  • Identify expenses adult children will be responsible for if moving back home, including car insurance, credit card bills, rent, food, etc.
  • Agree on terms for borrowing and repayment.
  • Determine whether you will remain in your current home, remodel it or sell it.

Review Investments & Insurance

  • Meet with your financial advisor to review and update your retirement savings strategy.
  • Remove non-dependent children from your auto policy and health insurance to reduce premiums.
  • Review your life insurance policy to make sure it still makes sense for your situation. If your mortgage is paid off and your dependents are no longer living in your home, you may want to consider reducing your coverage or switching to a policy that addresses your legacy needs.

Think About Tax Implications

  • Meet with your tax professional to discuss the tax implications of potential lifestyle changes.
  • Review your tax liability for dependents you currently claim on your tax return.
  • Adjust your tax withholding on Form W-4 through your employer, if appropriate.

Review Your Estate Plan

  • Review and update your life insurance beneficiaries.
  • Meet with your attorney to review and update your:
    • Will
    • Living will
    • Durable power of attorney
    • Health care power of attorney
    • Trust

How We Can Help

Having an empty nest can be a lifestyle adjustment, so that's why your financial advisor is here to answer any questions you may have along the way. We want to make sure your financial strategy is on track with your goals

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