Take this transition as an opportunity to reshape your retirement years.
After you’ve sent your children off into adulthood and moved them out of the house, what’s next? If you’re like many in this phase of life, you’re not quite ready for retirement and you’re still adjusting to all the independence.
Whether you couldn’t wait to see the kids off, or you are wishing they were coming back home, this is a great opportunity to develop a new outlook for your future and revisit your plans for retirement.
Consider your work timeline.
Evaluate how much longer you should work full-time and your plans after leaving your long-term career. Do you want to work part-time? Should you plan your retirement with the same time frame of your spouse or partner? Your financial advisor can help you to determine how long you should work and continue to earn before retiring.
Pay off outstanding debt.
You may have extra cash now that you aren’t still partially supporting any children at home. Eliminating debt is the first step toward flexibility in retirement. Start with the highest-interest debt first, such as credit cards, and then target student loans or other debts. Regardless of what debt you have, you should always have six months of emergency cash in savings.
Think about downsizing your home.
If you don’t plan to use your home as a destination for large family gatherings over the years, you may want to consider downsizing or what many call “right-sizing” to a less expensive home. Eliminating the extra space and finding a smaller home can cut down on utilities and upkeep expenses, which can help stretch retirement dollars further and help you save more. You may choose home that is smaller, has walkability, low real estate taxes and access to medical facilities.
Save more for retirement.
There are strategies that you can take advantage of to allocate more toward your retirement savings to build up your nest egg faster. For example, you can contribute catch-up money to your IRAs if you are 50 or older. This year, that additional amount is $1,000. You can also maximize any HSA contributions and even add more each month to savings accounts.
Review your estate plan.
Transitioning to an empty nest means that your estate plan may need to be revised to safeguard your financial legacy. It may also call for some challenging conversations with loved ones. Instead of naming guardians for your children, you may update your plans to divide assets and name a child as a will executor or give them power of attorney. It may be beneficial to also review life insurance coverage.
Reflect on what’s next.
Take this transition as a good opportunity for personal reflection. You may want to devote more time to your spouse and personal interests, or even take on volunteer work. This milestone in life should focus on exactly what you want to do with your time and spending money on things of value. So, it’s important to ensure you have the financial flexibility you need and want. Schedule time with your financial advisor to evaluate your goals and ensure your plan is on the right track for you and your family’s needs.
If you have questions about your retirement planning or if you would like your current financial plan reviewed, schedule an appointment on Bayntree’s online calendar by selecting the date and time that is most convenient for you! You can also always reach us by emailing info@bayntree.com.
Bayntree Wealth Advisors provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.
