8 Money Moves Empty Nesters Should Make Immediately

8 Money Moves Empty Nesters Should Make Immediately

Cindy Lamothe  Fri, July 12, 2024   GOBankingRates

The moment your youngest moves out of your family home is an emotional time, to say the least. You’re dealing with enormous change while also thinking about the future.

Becoming an empty nester can be an overwhelming experience, but according to experts, you should also make some strategic financial moves right away.

“Empty nesters must immediately reassess their financial priorities and redirect resources previously allocated to child-rearing,” said Abid Salahi, co-founder of FinlyWealth.

Reevaluate Your Financial Goals

“As empty nesters, it’s time to revisit and update your financial plans,” said Justin Godur, finance advisor and founder of Capital Max.

With fewer immediate responsibilities, he said you can now focus on long-term goals like retirement savings, travel or starting a new venture.

“I always tell my clients to adjust their savings strategies and ensure they align with their new life stage.”

Ben Klesinger, co-founder and CEO of Reliant Insurance Group and Helping Hand Financial, also reevaluated his financial goals with his wife upon becoming empty nesters.

“With fewer expenses, we travel internationally once a year now,” he said.

“Experiencing new cultures and adventures is rewarding after years of focusing on family responsibilities,” Klesinger said. “The trip budget comes from funds previously spent on the kids’ activities and expenses.”

Maximize Retirement Contributions

At this stage in life, experts advise increasing your contributions to retirement accounts like 401(k)s or IRAs.

“I personally boosted my retirement savings significantly once my children were on their own, leveraging catch-up contributions to maximize tax advantages,” Godur said.

Experts agree that this period is perfect for catching up on any retirement savings gaps.

“When I became an empty nester five years ago, I was shocked to realize I had unknowingly spent an average of $14,000 annually on my children’s expenses,” Salahi said.

“I’ve significantly improved my financial outlook by redirecting these funds to my retirement accounts,” he said. “This personal experience has shaped my advice to clients in similar situations.”

Streamline Your Budget

Make sure to analyze and adjust your budget to reflect the change in household size. For example, redirect funds previously allocated for children’s expenses towards investments or debt reduction.

“In my experience, this reallocation can substantially improve financial health and free up resources for future endeavors,” Godur said.

Consider Downsizing

A big money move to start considering is the possibility of downsizing your home.

Read More:  https://www.yahoo.com/news/finance/news/8-money-moves-empty-nesters-150052163.html