Vail Financial Focus column: Investment goals can change for empty nesters
When your children leave home and you become an “empty nester,” you’ll probably make several adjustments in your lifestyle. But how will your empty nest status affect your financial situation?
Everyone’s story is different, involving a range of variables. But here are a few issues to consider:
• Insurance: If your kids are through school, then your mortgage is nearly paid off and your spouse has accumulated a reasonable amount of money in an employer-sponsored retirement plan, you may not need life insurance to replace income or pay off debts. However, you might start thinking about other goals, such as ensuring your savings will last your lifetime or leaving a legacy to your loved ones or a charity. Life insurance may be able to help in these areas.
• Downsizing: Deciding whether to downsize your living space isn’t just a financial decision — it’s also a highly personal one. Still, downsizing can offer you some potential economic benefits. For one thing, if you still are paying off your mortgage, then a move to a smaller place could free up some of your monthly cash flow, which, again, you could use to boost your retirement accounts.
Furthermore, if your home has greatly appreciated in value, then you might make a sizable profit by selling.
• Estate plans: Years ago, you might have made various arrangements in a will or a living trust that dealt with taking care of your children if something should happen to you and your spouse. For example, you might have established a trust and directed it to make payments to your children at certain times and for certain purposes, such as education. But once your children are grown and have left your home, you may need to review and update your estate plans.
Keep in mind, though, that “empty nester” status is not always permanent.
You may have mixed feelings about becoming an empty nester, but, like most people, you will adjust. And by making the right financial moves, you can get off to a good start on this new phase of your life.
This article was written by Edward Jones for use by local Edward Jones financial advisers. Edward Jones and its associates and financial advisors do not provide tax or legal advice. Chuck Smallwood, Bret Hooper, Tina DeWitt, Charlie Wick, Chris Murray and Kevin Brubeck are financial advisors with Edward Jones Investments. They can be reached in Edwards at 970-926-1728, in Eagle at 970-328-4959 or 970-328-0361 or in Avon at 970-688-5420.
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