Claiming through life stages


Schools out for the empty nester

The kids are off your hands and it’s just you and your spouse. And whilst home may feel a little quiet at first, seeing your children flourish in the big world is so rewarding. It’s time to refocus – start capitalising on your newfound freedom and putting your personal goals first.

A transitional period for most, this shift between full-time parenting and retirement planning doesn’t have to be a daunting one. It’s time to reconnect with your spouse, pick up old hobbies and broaden your horizon again. 

In this month’s feature, we’re unpacking what it means to be an Empty Nester. With their children vying for independence, these individuals are entering a period of self-discovery as they redefine their personal ambitions and start grappling with their retirement future. 

From a financial planning point of view, it’s important for these individuals to really optimise their earning potential before they retire. Their main concern is that their spouse will be taken care of in the event of their death, so they usually have sizeable Life Lump Sum cover in place. They’re also at an age where they feel more vulnerable to the risk of an illness, as they start to hear of others they know experiencing such difficulties. The shortfall here is they believe they are adequately protected with Disability and Critical Illness Lump Sum cover.

As financial advisers, your role in recommending the best possible solution for your clients is critical. This means being able to provide them with the type of cover that provides for their needs today, as well as adapts to their future needs in retirement. Follow these simple 3 steps to give your clients a solution you’re confident in: 

  1. Calculate their future earning potential.

By using FMI’s Future Income Calculator (available at, you can quickly and easily calculate an individual’s specific future earnings over their lifetime. Take a 62-year old earning R70 000 a month as an example. They have an earning potential of (at least) R8.5 million before they retire at age 70.1

  1. Understand their risk reality.

Using the example above, your client needs to protect their future earning potential of R8.5 million against 4 possible risk events – a temporary illness or injury; a permanent disability; a critical illness; or death. When we take a look at the probability of each of these risks, the solution becomes even more powerful: 

A 62-year old has a 57% chance of experiencing a temporary injury or illness that will stop them from working for more than 2 weeks during their working career. By comparison, they would have a 10% chance of a permanent disability, a 24% chance of a critical illness and only a 7% chance of death before retirement.2  

That’s why FMI encourages advisers to prioritise cover that caters for the most prominent risks of temporary illness and injury, which could stop a client from earning an income.

  1. Propose a comprehensive solution. 

Empty Nesters, like everybody else, need to ensure they protect 100% of their monthly income across all risk events. And although at this age their cover could be more expensive, this individual acknowledges and appreciates the importance of protecting their last few income-earning years.

Ultimately, how we see this stage of life is important. It’s a window of opportunity – not only for our clients to rediscover themselves, but a chance for them to review how they want to go about achieving those goals, as well as what they want to leave behind. For advisers, this is your chance to help your clients understand the importance of optimising that income, while they’re still earning it. 

1FMI Future Income Calculator. 6% nominal growth, retirement age of 70

2FMI Risk Stats 2019. Risk stats calculated on probability for 62-year old before retirement age of 70.