Empty Nesters Are You There Financially? Perhaps, You Need to Look Again

By Mo Vidwans

Maybe you just dispatched the last of your pack to college, or maybe you just retired and are seriously thinking of what to do with the rest of your life. Yes, that is indeed a serious question. If you haven't thought about it as of yet or are beginning to think about it now, it may not be too late, but the urgency is definitely there. It does take a long time to decide how to fruitfully spend the rest of your life on this planet.

Men generally wish to do nothing other than sit in a rocking chair on the front or back porch and watch the grass grow (that thought does not last too long) and women have all the grand plans of buying a motor home and go places, visit relatives and grand children (that also has rather ephemeral value).

The planning for what to do when you run into such situation starts or should start long before you get there. Look at it this way; if you just became an empty nester by sending your youngest child to a college, then you still have good 30-35 years ahead of you. If you just retired and your children are now independent, then you have probably 20-25 years in front you. In either case, you have to seriously think about what you need to do with those years by keeping yourself busy, mentally challenged and entertained, and physically fit.

All of this will not happen if you haven't built a solid financial fort for yourself and the efforts for that also start long before you reach the point where you would need it.

Here are some of the salient points you need to ponder, if you haven't already done so.

Your expenses and income stream: For most of us the dynamics of our finances change in a major way once we retire. For sure the income stream is much smaller, albeit a steady one, and the challenge is to keep the expenses down and manageable so that they stay within the income we would have every month. It is a good idea to take some time and carefully work out this scenario. If I have to go by my experience, nobody wants to cut back on their habits and lifestyle, which means much attention has to be paid as to where the expenses need to be pared. One thing is for sure; the expenses need to be under the monthly income stream and the expenses need to include all the expenses including cars, weddings, car/home repairs, health expenses and travels. Just remember that the expenses keep marching upwards due to inflation but the income stays the same (except Social security). Your investment philosophy also needs to change to suit your retirement living.

Finding challenges to feel useful: The irony of this statement should be obvious. Having done enough of watching the grass grow and visiting friends and relatives, many find they still have a vacuum to fill; so get going about that as quickly as you can. It takes a while and you should take your time, but there is a need to do some soul searching to determine how you are going to make your life fruitful and helpful, not only for yourself but also for others. You have the professional expertise, knowledge, energy and time on your hand; you should put it to good use. I can only tell you what some of my friends and clients have done. They create a second career or become volunteers (food banks, salvation army, red cross, AARP), they become teachers' assistant, they teach English to the non-English speaking population, they teach classes in their known expertise, they go to senior homes and to children's schools. The list of ideas is endless and is only limited by your imagination. You just have to find your niche, something that will not only please/gratify you but will also fill a need.

Managing your health: The most important thing, of course, is to keep yourself in good shape. Now you don't have the excuse of not having time. This is easy if you put your mind to it. But you have to have the determination and the resolve to carry it out. Like the saying goes, if you have good health, you are the richest man in the world.

Is downsizing for you: Yes, it is. It may not become apparent to you immediately, may be not for first few years, but sooner or later in your retired life the downsizing thought starts to creep in. Do it before it is too late. May be the upstairs/downstairs movement is getting harder, or bathrooms are not quite designed to avoid falls, maybe the doorways are not wide enough for a wheelchair, etc. Those are just a few examples but you get the drift. You also may not need such a big house now since you are by yourself and the family is gone. The decision to downsize is real, but make time to think about it.

Friends and relatives: They are an important thread of your social fabric and I cannot possibly overstate that. Many studies have shown that our mental and emotional health depends on our social circle. Start cultivating that now and keep what you have. Many folks, especially seniors live by themselves, can be lonely and are striving to have a friendly human contact. We need to make sure now that we don't fall into that category. Unfortunately driving also begins to become difficult as we age and that takes away the freedom of just getting into our car and go somewhere at the strike of a whim. It becomes doubly hard too when our health does not co-operate.

Next month we will review estate planning in detail.

Mo Vidwans is an independent, board certified financial planner. For details visit www.vidwansfinancial.com, call 984-888-0355 or write to mpvidwans@yahoo.com.