Empty Nesters Case Study
Empty nesters: Getting serious about how to retire.
Names: Mark and Lisa (names changed for confidentiality)
Ages: Mid-50s
Marital Status: Married
Children: Two, both out of college and self-sufficient with occasional support
Parents: Both sets of parents are aging and need a lot of support. They worry one will have to live with them.
Employment: Both working professionals, actively engaged in their careers
Financial Situation: Own a beautiful home and a new electric car, but uncertain about retirement planning and spending habits
Concerns:
Mark and Lisa came to Altalune Wealth Advisors, LLC, feeling the weight of their busy lives and the desire to prioritize their health and well-being. With their children now self-sufficient and primarily living on their own, they found themselves reflecting on their own future. They love to travel and enjoy an active lifestyle but were becoming increasingly concerned about the realities of aging and the pressures of work. Although both have 401(k) accounts and Mark is set to receive a pension upon retirement, they were unsure if their current savings and investment strategies would allow them to maintain their desired lifestyle in the years to come.
During our initial meetings, we took the time to listen to Mark and Lisa's hopes and concerns. They expressed a strong desire to travel more and reduce their work commitments but were uncertain about how to transition into retirement and whether they would have the financial means to do so. With various retirement accounts, including an old 401(k) from Lisa’s previous job that she hadn’t accessed in years, they felt overwhelmed and unsure of how to manage their assets.
To address their concerns, we conducted a comprehensive financial plan to assess their current savings rate and project their future needs. We analyzed their existing investments, focusing on how to maximize growth in their 401(k) accounts and other retirement assets. Both care about their community and hope they can invest in ways that support what they care about. They are concerned about climate change and how that will impact their kids and grandkids. They are afraid of what’s to come. Our goal was to help them understand where they are now, and help them feel confident that they’ve been taking a lot of positive steps for themselves over the years. And then to create a path toward a comfortable retirement that would support their travel aspirations and desired lifestyle.
Recognizing the importance of tax efficiency, we provided some insight and tax analysis to evaluate how their savings strategies would impact their tax picture in retirement. They had not even considered how their tax situation would change when they retire. They haven’t paid such close attention to taxes since they are both w2 employees, except for trying to understand Mark’s bonuses. By optimizing their savings approach across different account types, we aim to reduce potential tax liabilities, allowing them to keep more of their hard-earned money for their retirement dreams.
Mark and Lisa had never fully considered the implications of one of them passing away suddenly and how that would impact the other’s lifestyle. To provide them with peace of mind, we conducted an insurance needs analysis. This assessment can help us determine the necessary coverage to create a financial safety net, ensuring that the surviving spouse could maintain their lifestyle and cover any unforeseen expenses.
Both Mark and Lisa’s parents are still living and they feel lucky to have such supportive and healthy parents. But they are beginning to decline and the pressure on the two of them to care for them, drive them to appointments, take care of deferred maintenance on homes and overall emotional support has been increasing in recent years. Mark’s parents live 1000 miles from them so the care is mostly face-time, emails, texts and a couple weeks a year in person. Lisa’s parent live across town and are more involved in day to day with them. Recently Lisa has learned of her parents substantial wealth, but they’ve been hesitant to elaborate on the details. She really wants to understand where they are, how much is really in their portfolio and if they can do some way overdue repairs on their home. Additionally her dad has beginning stages of dementia and Lisa is unsure of how her mom will manage the responsibilities of the home and her dad. We helped them create some talking points with their parents and Lisa’s parents joined them at a meeting inour office where we facilitated a conversation on end of life concerns. Lisa and Mark have developed skills in having those conversations and have plans with their parents to talk more regularly about finances.
Lastly, we encouraged Mark and Lisa to begin tracking their spending more diligently. While they believed they were keeping their expenses within their means, a closer look revealed potential areas for improvement. We introduced them to budgeting tools that would allow them to monitor their financial health better and make informed decisions about their future. Through our collaborative efforts, Mark and Lisa gained clarity and confidence in their financial future. With a comprehensive plan in place, they felt empowered to make informed decisions about their retirement and spending habits. They began to see a path toward traveling more and working less, allowing them to prioritize their health and well-being. Our ongoing support and guidance helped them transform their concerns into actionable steps, creating their meaningful life in retirement.
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your advisor prior to investing.