Smart Money Moves for Empty Nesters

Kids out of the house now? It’s time to put your retirement first.


Your children have grown up and moved out. It’s bittersweet. You’ve spent years raising them, sharing your home and finances with them—and now you’re free to reclaim your future. It’s a great opportunity to focus on making sure you’re on a strong path to retirement. Here are four financial decisions to consider once the kids move out.

Review your finances

Re-evaluate your budget: Assess how much you’re spending and look for areas where you can cut back now that you have an empty nest. Data from a federal survey released in 2017 shows that a family earning about $59,000 to $107,000 with two kids will spend close to $13,000 a year per child on things like food, clothing, allowances, school fees and other necessities. No longer paying for these things is going to free up some cash in your budget. You can use those extra funds to bulk up your nest egg, pay down credit card debt or contribute to an emergency fund.

Downsize sensibly

With an empty nest, you may see new potential in your home. Maybe you can convert your garage or basement into an apartment and list it on Airbnb for extra cash.

Or perhaps you realize you don’t need as much space. Housing makes up 29 percent of the total cost of raising a child—making it the largest expense for families, according to the U.S. Department of Agriculture. So rather than stay in a home that’s too big for you—and spend money heating and cooling rooms you won’t use—you could downsize to a smaller place. A lower house payment and cheaper utilities, along with less expensive maintenance and property taxes, can increase the money you can put away for your future.

Grow your retirement savings

Discover four reasons for considering annuities for retirement planning.

Learn More

The financial demands of raising children—everything from piano lessons to college funds—may keep you from contributing as much to your retirement account. But now that you have an empty nest, it’s a smart time to ramp up your retirement savings. According to the Center for Retirement Research at Boston College, couples with two children who earn $100,000 annually should be able to save 12 percent once their children have moved out.* Yet, parents tend to only increase their retirement savings by 0.3 percent to 0.7 percent on average when they become empty nesters, which can undermine their retirement readiness, according to the study.

Weigh your insurance needs

Review your insurance and look for places to save while still ensuring that your coverage takes care of your needs.

Can you reach your retirement savings goals without the help of a life insurance policy? What if you or your spouse could no longer contribute sufficiently to retirement savings? This is where life insurance can help.

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