Becoming an empty nester can be an exciting time full of new adventures, plans, and goals. It's also the perfect time to examine your finances and set yourself up for a stress-free retirement.
So as you prepare for this big life change, here are some key financial moves new empty nesters must make.
Get instant access to hundreds of discounts
Over 50? Join AARP today— because if you’re not a member you could be missing out on huge perks like discounts on travel, dining, and even prescriptions.
Get 25% off membership — just $15 for your first year with auto-renewal — and a free gift if you join today.
Review your budget
/images/2024/07/04/senior-couple-consulting-finance-advisor.jpeg)
Kids can be expensive. According to a 2017 study by the U.S. Department of Agriculture, raising a child through the age of 17 typically costs more than $230,000.
When your last kid moves out, it should free up a decent amount of cash each year. Take this chance to review your budget and see where you can use that money to start investing or find other ways to maximize your financial goals.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
Meet with a financial advisor
/images/2024/07/04/senior-couple-reviewing-bills-together.jpeg)
Becoming an empty nester marks the perfect time to check in on your overall financial health.
Getting professional advice from a financial advisor might help you decide on the best ways to allocate your money during these last few years before retirement.
Consider downsizing your home
/images/2024/07/04/senior-couple-moving-in-new-home.jpeg)
Now that fewer people are living in your home, you may be able to downsize and shed some of your expenses. Larger homes typically come with higher bills for lawn care, utilities, and property taxes.
Swapping your current home for something smaller might reduce these costs. If you've lived in your home for a while, you might even reap enough profit when you sell to put some extra money toward retirement savings.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1 <p>Clients who are able to stay with the program and get all their debt settled realize approximate savings of 46% before fees, or 25% including our fees, over 12 to 48 months. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Not all clients complete our program for various reasons, including their ability to save sufficient funds. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. We do not assume consumer debt, make monthly payments to creditors or provide tax, bankruptcy, accounting or legal advice or credit repair services. Not available in all states. Please contact a tax professional to discuss tax consequences of settlement. Please consult with a bankruptcy attorney for more information on bankruptcy. Depending on your state, we may be available to recommend a local tax professional and/or bankruptcy attorney. Read and understand all program materials prior to enrollment, including potential adverse impact on credit rating.</p>
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Use your extra savings to pay down debt
/images/2024/07/04/senior-couple-reading-bills-at-home.jpeg)
Reducing or eliminating your debt can put you in a better financial situation.
Whether you have credit card debt, medical debt, car loan debt, or mortgage debt, using your extra cash to pay off these balances will improve your monthly cash flow. Paying down balances will save you money on interest, too.
Start saving more for retirement
/images/2024/07/04/senior-woman-signing-documents.jpeg)
Here is some good news if you are at least 50: You can use catchup contributions to max out your retirement accounts.
The IRS limit on 401(k) contributions for 2024 is $23,000. However, those 50 or older can add $7,500 for a total of $30,500.
Once you have maxed out those accounts, you can still invest money in savings or other investment accounts to fund your retirement.
Trending Stories
End unlimited financial support to your children
/images/2024/07/04/mother-and-daughter-laughing-together.jpeg)
Many empty nesters still financially support adult children, but this can put the parents' own financial health at risk. So, it might be time to make a change.
Start by having a conversation with your children and mapping out how they can achieve financial independence. This may take some lifestyle adjustments or creative planning, but it will help them create their own financial security.
Once you have withdrawn financial support, you can direct that money to other places.
Start thinking about an estate plan
/images/2024/07/04/couple-doing-taxes-together.jpeg)
Now is the time to establish an estate plan. This plan should include your will, beneficiary designations, power of attorney, and any other information your family needs to know if you die or become unable to make decisions for yourself.
If you already have an estate plan, you probably need to update it now that you no longer have minor children living at home. It's also a good idea to share your estate plan with your adult children to prevent any feelings of surprise or resentment after you die.
Set up — or bulk up — an emergency savings fund
/images/2024/07/04/senior-woman-reviewing-bills-in-kitchen.jpeg)
An emergency savings fund should be kept separate from your other accounts. Consider using a high-yield savings account for this fund so you can earn a little interest.
The exact amount you need will vary based on lifestyle and expenses, but a good general recommendation is to save enough to cover expenses for three to six months.
Review your insurance needs
/images/2024/07/04/swap-party-for-try-on-clothes.jpeg)
As your family dynamic changes, so does your need for insurance.
Take a look at your car, homeowners, and life insurance policies. You may need to change your coverage amounts or terms or update the beneficiaries. You might even save some money after making these adjustments.
Earn cash back on everyday purchases with a debit card
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2 <p>See website for details.</p>
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Learn more about the Discover Cashback Checking account
Reduce clutter and sell what you don't need
/images/2024/07/04/coins-jar-with-emergency-fund-label.jpeg)
This is the perfect time to clean out the basement or crawl space and get rid of anything you are not using. Having a garage sale is always an option, but consider listing and selling in online marketplaces too.
If you have been keeping scrapbooks, collections, or other valuable memorabilia for your children, you can give it to them now to enjoy — and free up some space in your home.
Resist the temptation to splurge
/images/2024/07/04/woman-using-card-for-shopping-online.jpeg)
Consider the long-term impact of your spending before you splurge by using your newfound funds.
Renovating the house or buying a shiny new sports car may sound great, but excess spending now could negatively impact your standard of living during retirement.
Account for extra expenses
/images/2024/07/04/woman-cleaning-house-using-gloves.jpeg)
There are plenty of ways that becoming an empty nester can help you get ahead financially. However, don't forget about additional expenses that might pop up.
If your child formerly was helping with household chores, you may need to hire help to keep up with the housework. You may also need to increase your travel budget to account for weekends and holidays spent visiting your kids at their new home.
Bottom line
/images/2024/07/04/senior-couple-drinking-coffee-in-kitchen.jpeg)
Financial advice such as "save more money" and "get out of debt" may sound unexciting, but these principles are helpful for many people, including empty nesters.
As you enter your golden years, you want to review your retirement plan. Parents often put their kids first, but now is the time to take your financial health seriously.
Up To 5% Cash Back
Discover it® Cash Back
Current Offer
Discover will match all the cash back you’ve earned at the end of your first year.
Annual Fee
$0
Rewards Rate
Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases.
Benefits
- $0 annual fee
- Intro APR on purchases and balance transfers
Drawbacks
- Requires you to activate the highest-earning category each quarter
- Not accepted as widely overseas as Visa or Mastercard
- INTRO OFFER: Unlimited Cashback Match for all new cardmembers–only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases.
- Redeem your rewards for cash at any time.
- Apply and you could get a decision in as little as 60 seconds. No annual fee.
- Start shopping and earning rewards in minutes with your digital card, before your physical card arrives in the mail, if eligible.
- Get a 0% intro APR for 15 months on purchases. Then 18.24% to 27.24% Standard Variable Purchase APR applies, based on credit worthiness.
- Terms and conditions apply.
Subscribe Today
Learn how to make an extra $200
Get vetted side hustles and proven ways to earn extra cash sent to your inbox.
Author Details