Your flock has flown the nest, leaving behind memories and a hallway of newly vacant rooms. Seeing the last child in the household head out on their own can be an emotional experience. Whether the kids are off at school, starting families of their own, or moving across the country to follow their dreams, it’s time to shift your focus back to how you want to spend your time and where. This milestone can be a great opportunity to revisit your financial plan, so here are some tips to help you navigate being an empty nester.
Reflect On What's Next for You
Being an empty nester means the next stage of your life is about to begin. Your retirement may be on the horizon, so it's not too soon to think about what your life will be like after retirement. Some questions to consider:
- How much longer do I want to continue working?
- Should I time my retirement to that of my significant other?
- How will I fill the days and find fulfillment once I finally retire?
Embrace your newfound financial flexibility and if you are able, consider funneling more cash toward retirement savings. Supercharging your retirement at this stage in life can help build up your nest egg. Consider taking advantage of the IRS' catch-up provisions and using a health savings account (HSA) to help pay for medical expenses.
Review Your Budget
You may find that your household finances look different once your kids have flown the coop. Your monthly grocery and utility bills may go down, so go through your budget and make changes that better reflect your current situation. Remember that not all of your expenses will go down: You may find yourself eating out more or spending more on travel, so make sure to factor those costs into your budget.
Pay Off Debt
Your new budget may leave you with extra cash. Make the most of that extra money by using it to pay down any outstanding debt. Eliminating these debts will give you much more flexibility as you approach retirement. With or without debt fully in check, plan to keep 3 to 6 months in emergency savings, you never know when you might need it.
Where Do You Want to Live?
Think about where you plan to live 5, 10, even 20 years from now. Factors to consider include access to medical facilities, shopping, walkability, weather, real estate taxes, and the amount of travel that you expect to do in retirement. Think about what you'll need and want for the future and consider 'right-sizing' your residence. For example, if you anticipate taking care of an older relative, or have a kid back from college for the summer, consider a multi-generational suite option. Another option might be to renovate your current home and add features to make you more comfortable as your gracefully age in place.
Declutter And Organize
Start by taking it one step at a time, room by room. As you go through everything you’ve accumulated, make piles of items you want to keep or donate. Be honest with yourself and consider its value to you. Make sure to have the kids go through their things as well. Give them a certain amount of flexibility on what they can leave with you and what they need to take with them. While many families pass heirlooms on later in life, consider handing down a few early. That way you can see the joy it brings them now and take pride in knowing the traditions are being kept.
Review Your Estate Plan
It’s possible you drew up your estate plan when you first started having kids. For instance, instead of your estate plan stipulating guardianship of your children, you may want to focus on how to divide your family's assets among your children. Other revisions might include naming an executor of your will or power of attorney in the event you're incapacitated. While these can be difficult conversations to have with loved ones, they're also important.
We partner with Hughes Law Firm throughout the year to provide free webinars on Wills & Trusts. Be sure to check our event calendar under “SmartStuff” regularly to see when these webinars are available. C∙U∙D members receive a discount with Hughes Law Firm, so let them provide you with the legal assistance you deserve. For any questions, give them a call 303.423.8423.
The transition to an empty nest can be difficult and exciting all at once. Take time to reflect on how you're feeling about this new chapter in your life. Be sure to revisit your saving, spending, and retirement planning strategies so that these life changes have a positive long-term impact on your life and those you love.
Reach out to Financial Advisor Shelley Hertel in Credit Union of Denver’s Investment & Retirement Center for more advice. 303.239.1179 Shelley.hertel@lpl.com