Make the Most of Your Transition to a Child-Free Home
After spending decades caring for children, it can be quite the adjustment to transition to being an empty nester. You’re likely to experience a wide range of emotions, and some of the choices you make during this transition can have a lasting impact on your well-being and lifestyle. That certainly includes your financial decisions so, as you transition into this new chapter of your life, take time to revisit your financial plan. Consider your future and read through the savvy smart financial moves below to help you along the way.
Tip #1 for Empty Nesters: Set Expectations and Boundaries
It may be true that a parent’s job is never done, but that doesn’t mean that you should be expected to support your children financially once they’re in adulthood. A recent study reported that nearly 40% of parents are still financially supporting their children in some way or another. While the desire to do what you can to support your children is understandable, you mustn’t be doing so at the risk of your own financial security.
That’s why it’s so important to teach your children financial literacy and instill smart money habits into them so that they can achieve financial independence. As they get ready to leave the house, sit down with them and help them map out a budget and financial plan that allows for them to support themselves without requiring consistent support from you. Setting expectations from the outset can help facilitate understanding and communication as you navigate this new stage of your relationship.
Tip #2 for Empty Nesters: Focus on Retirement Planning
Once your children are living on their own, you’ll be able to shift your focus from supporting them to focusing on your financial future – and that means straightening out any wrinkles in your retirement plan. It may serve you to begin by crafting a list of which financial goals you want to prioritize, and then putting a plan in place to make that happen. You might choose to start by tackling all your debts, reducing your living expenses, or finally paying off your mortgage. Or, perhaps you want to begin by putting as much money as you can into your retirement savings accounts. Figure out what makes the most sense for your financial plan and enlist the help of a financial advisor for professional assistance.
Tip #3 for Empty Nesters: Solidify Estate Plans
No matter how sure you are of your estate plans, most empty nesters need to finalize or revise them at this stage of life to ensure that everything is in place and nothing needs to be updated. It’s important to regularly review and update your estate plans to help protect your financial legacy, express your wishes clearly, and ensure that your loved ones are taken care of after you’re gone. Be sure to clarify your wishes and plans, get them in writing, and ensure that you have all the proper legal documents stored where those you trust can access them easily when needed.
Tip #4 for Empty Nesters: Consider Downsizing
After spending so many years making your house a home, the idea of downsizing can be difficult to imagine. If you are living in a house that feels too big, downsizing could be a potential way to reduce your expenses and could also offer a change of focus, depending on your individual circumstances. By reducing utility costs, taxes, and rent, you may have more money available to allocate towards paying off debts or boosting your retirement savings.
Empty Nesters Should Have a Solid Financial Plan
An empty nest can be the start of an exciting time in your life when you can begin prioritizing yourself and your own needs. Of course, you’ll want to make thoughtful financial decisions that support the future you envision for yourself.
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