Financial Considerations for Empty Nesters
As each child leaves your home, you may feel either thrilled or sad. One benefit to your children moving out and starting their own lives is the fact that they will pay their own way (you hope). This can mean more income left in your bank account to allow you to do some fun things or to pay off some bills before retirement. The critical thing to remember is that retirement is just a few years away at this point, which can mean you want to prepare for it financially and so you can live your retirement dream.
Prepare for Retirement
The first thing you want to consider is how close retirement is. If you had children in your 20’s, then (hopefully) they will move out when you are around 40-50. This leaves you 10-15 years to save and invest money to allow you to retire in the way you want, whether it is traveling, playing golf regularly, or simply enjoying time at home. Saving should have ideally begun earlier than this, but realistically, it may not, so you may have to save more aggressively now. Children moving out and starting their own lives can allow for more aggressive saving and paying off bills.
Prepare for Emergencies
Whether it is you or your children, there will most likely come a time when you or they will have a financial emergency. We hope that after our children graduate from college and get a job that they will be able to meet their financial obligations. However, this is not realistic these days. It is hard to make ends meet – especially when your children start having children and are just starting their career or a marriage. Having an emergency fund will allow you to help your child if needed or cover your own expenses that crop up unexpectedly.
Prepare for Living
Now that you have a little more money in your wallet, it may be time for you to do some things you have been putting on the back burner, due to kids and bills. Many people want to visit different travel locations after their children leave home. No more having to cater to your kids. Now you can go where you want and do what you want, no matter what it is. That is not to say that you don’t save for retirement. You want to find that balance of preparing for the future and enjoying your present.
Empty nesters will see the majority of their financial responsibilities decreasing, but many adult children return home after a few months or even years. For adult children, it is hard to move out and be faced with all the bills, simply because they do not realize how much it costs to live out from under their parents. So, let the nest empty and use that time to plan for your future. You will be glad you did!
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