The kids have grown up and moved out of the house and you’re getting used to being an empty nester. It’s a time for adjustments and figuring out your life apart from your kids. After you bask in this enormous accomplishment, it’s a good time to check back in with your finances and reevaluate your saving priorities so you can build wealth.

A good first step is making sure what you have saved is protected. Then you’ll have the freedom to invest and build wealth as you prepare for retirement. Here are some key wealth management dos and don’ts for both protecting and investing your money.

Protection comes first

1. Take a fresh look at the benefits you get at work

If your job offers benefits, your financial strategy should begin at work. Not only has your company already done the legwork by researching and finding quality plans, but these plans are likely to cost you significantly less than what you might pay if you enrolled outside of work. These benefits can include health-related insurance as well as insurance to protect your finances, like life insurance or disability insurance. With your children out of the house, consider what adjustments you may need to make.

2. Review your current life insurance coverage

The framework of a solid financial strategy begins with protecting yourself and your family and making sure they’re covered no matter what life throws your way. Review your life insurance and make sure the coverage you have now is still appropriate to cover anyone who relies on you financially.

If you own term life insurance, it will help protect your loved ones for a limited time period. Whole life insurance, a type of permanent life insurance, can provide guaranteed coverage for life with the potential to accumulate cash value, which is money you can use during your lifetime*.

Besides helping you build a cash asset that’s not dependent on the rise or fall of the stock market, whole life insurance can also be an efficient way to build a lasting tax-favored asset and eventually leave a legacy to your loved ones. When your children become adults, whole life insurance could be a good gift to get them financially ready early in life.

3. Protect a portion of your income with disability insurance

Your income is your most valuable asset. If you’re using your income to pay for your children’s education, they rely on it heavily. If you couldn’t work because of an illness or accident, it could be difficult for your children to get through college on their own. Before you examine how best to invest the money you earn, make sure you protect it.

Disability income insurance, which may be available through your employer, can help provide income even if an illness or injury prevents you from working.  

4. Don’t leave coverage gaps

After you’ve calculated exactly how much life insurance and disability insurance coverage you already have, determine if it’s enough to provide for yourself and your children. Everyone’s needs are different, but if your children are still dependent on you financially and you’re in your 40s, a good rule of thumb is to have 15 times your salary in coverage.

If you don’t have substantial savings, life insurance and disability income insurance become even more important. Standard disability income insurance offered through your work typically covers up to 60% of your salary before taxes.1 If that’s not enough, you can apply for a separate individual disability income policy through a financial representative or at work if it’s offered.


Saving and investing comes next

1. Save more to help accumulate wealth

With the kids out of the house, you may be able to start saving more. If you don’t already have one, consider creating a budget. If you do have a budget, take another look at it to see where you can cut back on expenses that you may no longer need with the kids gone. For example, moving to a smaller house could cut your cost of living significantly.

2. Consider opening a brokerage account

It doesn’t take much money to start investing. A brokerage account can be an easy way to keep track of your money and take control of your financial life. You can combine multiple investments, such as stocks, bonds, mutual funds, etc., into a single account to house all your assets in one place. You’ll have a comprehensive view of all your investments through a single monthly statement. Plan to sit down with your financial representative and review your investments to make sure they’re still working for you and so they better understand your financial goals.

3. Take advantage of tax-deferred investments

If you haven’t been focused on retirement planning, it’s a good time to think about how you’ll afford the retirement you want. For a start, consider increasing your contributions to your 401(k) if your employer offers one. Your deductions will automatically come out of your paycheck, and the plan should provide significant tax benefits that can reduce your taxable income. If you’re lucky, your employer may match some of the contributions you make to your plan, so be sure to take full advantage of that, because it may help your savings grow faster. Even if you have a 401(k), you can build more wealth by opening other accounts. A traditional individual retirement account (IRA) may also provide you with tax deferral, and if you qualify, savings accounts like a Roth IRA can offer you tax-free withdrawals.

4. Don’t put all your eggs in one basket

Owning a wide variety of investments helps minimize the risk any one individual investment can have on your overall portfolio. One way to broadly invest in the market is through mutual funds. A mutual fund is a package of individual stocks, bonds, short-term investments, or other investment products that are managed by a professional fund manager.

5. Review your finances annually

You should be looking at your insurance coverage and your portfolio at least once a year, but life changes like becoming an empty nester should trigger an even deeper look. Review your policies and investments and make adjustments to your asset allocation, or mix of investments­, to meet your long-term needs for building wealth. Even if your goals remain the same, you may need to rebalance your portfolio if changes in the market have shifted the percentage of your portfolio that is allocated to stocks, bonds, and other investments.

6. Talk to a financial representative to help you bring it all together

Working with an experienced financial professional you can trust is the easiest way to help assure you’re making the best decisions to create the kind of financial future you want. Your financial representative can discuss all your options, recommend ones that best meet your individual needs, and help you stay on track to achieve your goals.

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Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

*Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty.

All investments contain risk and may lose value. Securities products offered through Park Avenue Securities LLC (PAS), member FINRASIPC. PAS is a wholly owned subsidiary of The Guardian Life Insurance Company of America (Guardian), New York, NY. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

This material is intended for general public use. By providing this material, Guardian is not undertaking to provide investment advice for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial professional for guidance and information specific to your individual situation. All investments contain risk and may lose value. Diversification does not guarantee profit or protect against market loss.

Investors should consider the investment objectives, risks, charges and expenses of mutual funds carefully before investing. This and other information are contained in the fund’s prospectus, which may be obtained from your investment professional. Please read it before you invest or send money. Investments in mutual funds are subject to risk, including possible loss of the principal amount invested.

Securities products and advisory services offered through Park Avenue Securities LLC (PAS), a registered broker-dealer and investment adviser.

PAS is a wholly owned subsidiary of Guardian and a member FINRASIPC.

Mutual Funds Disclosure for PAS

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