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Practical tips for empty nesters

Key takeaways

  • This stage in life can be a great opportunity to revisit both your financial plan and your plan for the important things you want to do next.
  • If your newfound financial flexibility permits it, consider, funneling more cash toward retirement savings.
  • Think about where you plan to live 5, 10, even 20 years from now. Instead of downsizing, explore "right-sizing" your residence every 5 to 10 years.

Seeing the last child in your household head out into the real world can be an emotional experience for parents, and because of COVID, you may have experienced this departure more than once! It's normal to feel conflicted, anxious, or even lonely—but it can also be exhilarating: Suddenly, your time is your own! The house is blessedly empty, and you aren't on call for pickups from soccer practice or cleaning up after a teen sleepover. Heck, you can take a much-deserved vacation or simply have the TV remote all to yourself!

This milestone also can be a great opportunity to revisit both your financial plan and your plan for the important things you want to do at this juncture in life.

How to let go as you let your child grow

Although your social life may have been built around your kids and their activities, you've entered a new phase of life. It's now time to focus on the positive in your life and try to:

  • Recognize that it's OK to grieve the departure of your last offspring; stay positive and focus on the future of your family.
  • Look inward for self-acknowledgement. You may no longer feel to need to find your own self-esteem through the triumphs and accomplishments of your children.
  • Combat loneliness by making new friends, joining a book club, helping out others in need, or trying your hand at a new side hustle (for fun or profit—or both).
  • Schedule a date night with your spouse/partner.
  • Remind yourself that your parenting duties are far from finished. You still have a long time ahead to love and coach your kids. They still need you.

Reflect on what's next for you

Your retirement may be on the horizon, so it's not too soon to think about what your life will be like after you stop working for pay. Some questions to consider:

  • How much longer do I want to continue working?
  • Should I time my retirement to that of my spouse/partner?
  • How will I fill the days and find fulfillment once I finally retire?
  • What kind of volunteering options in my community can I tap into?
  • Is it too early to start exploring a second act or encore career?

After you've taken the time for personal reflection, revisit your financial situation and explore these steps to make the most of being an empty nester.

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Review your budget

You may find that your household finances look a lot different once your kids have flown the coop. Your monthly grocery and utility bills may go down, and you finally may be able to cut the cord on pricy cable TV service. Go through your budget and make changes that better reflect your current situation.

Remember that not all of your expenses will go down: You may find yourself eating out more or spending more on travel, so make sure to factor those costs into your budget. Your kids also may still rely on you for some financial assistance. Try to set limits on that help—both for their sake and yours.

Tip: Read Viewpoints on Ready to retire? You still need a budget .

Pay off debt

Your budgeting work may leave you with a surplus of cash. Make the most of that extra money by using it to pay down any outstanding debt. Eliminating these debts will give you much more flexibility as you approach retirement.

If you still have debt—student loans, an auto loan, or a home equity or mortgage loan—try comparing the interest rate on your debt to our rule of 6%. That can help you decide whether your next priority should be paying more than the minimum on remaining debts, or investing additional dollars toward retirement. (If you do have student loans or a mortgage, also make sure you're taking advantage of any tax deductions you're eligible for on the interest you pay.)

Here are some suggestions on how to focus your debt reduction efforts: It might be smart to start by tackling high-interest debt such as credit cards; next, target private student loans, which typically have higher interest rates than government loans. While you're paying off these higher rate loans, make sure to pay the minimum on other debts such as auto loans or credit cards with low interest rates. With or without debt fully in check, plan to keep 3 to 6 months in emergency savings—you never know when you might need it.

Focus on retirement

Embrace your newfound financial flexibility and if you are able, consider funneling more cash toward retirement savings. The benefits of supercharging your retirement at this stage in life are two-fold: First, these larger contributions can help build up your nest egg. Consider taking advantage of the IRS' catch-up provisions, as well as using a health savings account (HSA) to help pay for medical expenses:

In 2022, the annual contribution limit for IRAs, including Roth and traditional IRAs, is $6,000. In 2023, that limit is $6,500. If you're age 50 or older, you can contribute an additional $1,000 annually.

For 2023, the IRS contribution limits for HSAs are $3,850 for individual coverage and $7,750 for family coverage.

If you're 55 or older during the tax year, you may be able to make a catch-up contribution, up to $1,000 per year. Your spouse, if age 55 or older, could also make a catch-up contribution, but will need to open their own HSA.

Think about right-sizing your home

"Empty nesters need to think through where they plan to live throughout a 30+ year retirement, which may encompass several different kinds of living situations," advises Boston-based Fidelity advisor Scot Wilks, CFP®. "Some people are excited to downsize from a large suburban home and move to a condo in the city. Others are using their home as a family destination for holiday gatherings as well as a launching pad or home base for widescale travel."

He adds, "Either way, I encourage clients to think about where they plan to live 5, 10, even 20 years from now. Instead of downsizing, we talk about 'right-sizing' your residence every 5-10 years. Decisions often are based on things like access to medical facilities and shopping, walkability, weather, real estate taxes, and the amount of travel that you expect to do in retirement."

Another option might be to renovate your current home and add features to make you more comfortable as your gracefully age in place.

Review your estate plan

Like most parents, you probably drew up your estate plan when you started having kids. And like most parents, you probably haven't reviewed the details of that plan since your kids were in diapers. But your life is different today, and your estate plan should reflect that.

For instance, instead of your estate plan stipulating who would get guardianship of your children, you may want to focus on how to divide your family's assets among your children. In fact, you may even want to name one of your children as an executor of your will, name them as a successor beneficiary on investment accounts, or give them power of attorney in the event you're incapacitated. While these can be difficult conversations to have with loved ones, they're also important.

The transition to an empty nest can be difficult and exciting all at once. Take time to reflect on how you're feeling about this new chapter in your life. Lastly, working with your financial advisor to revisit savings, spending, and retirement planning strategies can help you validate that these life changes have a positive long-term impact on your life and those you love.

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Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

A Health Savings Account (HSA) is a tax-advantaged trust or custodial account used in conjunction with a high-deductible health plan (HDHP) which eligible individuals may establish to pay for current and future qualified medical expenses. Health Savings Accounts were created under the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

The CFP® certification is offered by the Certified Financial Planner Board of Standards Inc. ("CFP Board"). To obtain the CFP® certification, candidates must pass the comprehensive CFP® Certification examination, pass the CFP® Board's fitness standards for candidates and registrants, agree to abide by the CFP Board's Code of Ethics and Professional Responsibility, and have at least 3 years of qualifying work experience, among other requirements. The CFP Board owns the certification mark CFP®  in the U.S.

This information is general in nature and provided for educational purposes only.

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