Becoming an empty nester is a big life change. The house is quieter, there’s a little extra time in the day, and—most importantly—your finances are about to look a whole lot different. Without the daily expenses that come with raising kids, now’s the time to reassess your financial situation and make smart moves for the future by looking at smart financial planning for empty nesters.

If you’re wondering where to start, you’re not alone. Let’s walk through some practical financial planning tips for empty nesters so you can make the most of this new phase of life.

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Reevaluate Your Financial Goals

With the kids out of the house, your financial priorities are shifting. What worked before might not be the best plan now. It’s a good time to sit down and take a hard look at your financial situation.

Financial Planning for Empty Nesters

1. Take Stock of Your Current Finances

  • How much do you have in savings?
  • What debts are still lingering?
  • How much do you spend each month, and where is your money going?

2. Set New Priorities

  • Do you want to travel more?
  • Are you planning for an earlier retirement?
  • Is downsizing your home on the horizon?

3. Adjust Your Budget
Your expenses are probably lower now, which means you might be able to:

  • Pay off debt faster
  • Boost your retirement contributions
  • Save for big purchases or investments

Take a look at where your money is going and decide where it should go instead.

Financial Planning for Empty Nesters | Boost Retirement Savings

Now’s the time to focus on your retirement fund. With fewer expenses related to your kids, you can put more money toward your future.

1. Max Out Your Retirement Contributions

  • If you’re 50 or older, you can make extra “catch-up” contributions to your 401(k) or IRA.
  • Increasing your contributions now can make a big difference in the long run.

2. Review Your Investment Strategy

  • Are you still investing like someone in their 30s?
  • It might be time to rebalance your portfolio to reflect your retirement timeline.

3. Consider a Roth IRA Conversion

  • If you expect your tax rate to be higher in retirement, moving money from a traditional IRA to a Roth IRA could be a smart move.

Financial Planning for Empty Nesters | Manage Debt Effectively

Debt can eat into your retirement savings, so paying it off should be a priority.

financial planning for empty nesters

1. Tackle High-Interest Debt First

  • Credit cards
  • Personal loans
  • Any other high-interest balances

2. Decide What to Do About Your Mortgage

  • If you’re close to paying it off, consider accelerating your payments.
  • If your home is bigger than you need, downsizing could free up extra cash.

3. Refinance if It Makes Sense

  • Interest rates fluctuate, and refinancing to a lower rate could reduce your monthly payments.

Getting debt under control now can give you more freedom later.

Financial Planning for Empty Nesters | Review Insurance Coverage

Now that your kids are financially independent, your insurance needs may have changed. You could be overpaying for policies that no longer make sense for your lifestyle. A quick review of your coverage could free up extra money for other financial goals.

1. Rethink Life Insurance

  • If you bought a large policy when your kids were younger, you might not need that level of coverage anymore.
  • Consider switching to a lower-cost term policy or reducing your existing coverage.
  • If you’ve built up enough savings, you might not need life insurance at all.

2. Check Your Homeowners and Auto Insurance

  • If your child was on your auto policy but has moved out and has their own, remove them to lower your premium.
  • If your home is worth more now than when you bought it, you might need to adjust your coverage limits.
  • Some insurance companies offer discounts for retirees or people with fewer drivers in the household—ask about savings options.

3. Look Into Long-Term Care Insurance

  • Long-term care (LTC) insurance helps cover the cost of assisted living, nursing homes, and in-home care.
  • The earlier you buy, the cheaper the premiums. Waiting too long could mean higher costs or disqualification due to health reasons.

A few small adjustments here can make a big difference in your monthly budget.

Financial Planning for Empty Nesters | Plan for Healthcare Expenses

Medical costs can add up fast, especially as you get older. If you’re not factoring them into your financial plan, you could be in for a shock later.

Financial Planning for Empty Nesters

1. Open or Max Out a Health Savings Account (HSA)

  • If you have a high-deductible health plan (HDHP), an HSA lets you save money tax-free for future medical expenses.
  • The money rolls over each year and can be used well into retirement.

2. Review Medicare Options Early

  • Medicare kicks in at age 65, but not all plans are the same.
  • Research supplemental insurance (Medigap) or Medicare Advantage plans to see which one fits your needs.

3. Consider Long-Term Care Costs

  • Even if you don’t get LTC insurance, set aside money for future care needs.
  • Assisted living and nursing home care can cost thousands per month—having a plan now can prevent financial stress later.

Medical expenses are one of the biggest retirement costs, so planning ahead is key.

Financial Planning for Empty Nesters | Consider Downsizing or Relocating

Now that you don’t need extra bedrooms or a large backyard, moving to a smaller home might make sense.

1. Weigh the Financial Benefits of Downsizing

  • A smaller home means lower property taxes, utility bills, and maintenance costs.
  • If you have significant equity in your home, selling could free up a big chunk of cash for savings or investments.

2. Explore Cost of Living Differences

  • Moving to a different city or state with lower taxes and living expenses could stretch your retirement dollars.
  • Some states don’t tax Social Security or retirement income—research your options.

3. Think About Lifestyle, Not Just Finances

  • Do you want to live closer to family?
  • Would you prefer a retirement community with built-in social activities?
  • Do you want to move somewhere warmer (or cooler)?

Moving isn’t just about saving money—it’s about making sure your living situation matches the life you want.

Financial Planning for Empty Nesters | Support Adult Children Wisely

It’s natural to want to help your kids financially, but it’s important to set boundaries. You’ve worked hard to get to this stage in life, and your financial security should come first.

1. Set Clear Financial Boundaries

  • If your kids are financially independent, resist the urge to keep covering their expenses.
  • If they still need some help, set a budget for how much you’re willing to contribute—and stick to it.
  • Avoid dipping into your retirement savings for their expenses.

2. Help Without Enabling

Instead of giving direct handouts, consider:

  • Helping with financial education—teach them about budgeting, investing, and managing debt.
  • Offering a loan rather than a gift, with clear repayment terms.
  • Encouraging them to build emergency savings so they don’t rely on you for financial bailouts.

3. Avoid Co-Signing Loans or Taking on Debt for Them

  • If they can’t qualify for a loan on their own, they may not be ready to take on that responsibility.
  • Co-signing means you’re legally responsible for the debt if they don’t pay.
  • Prioritize your own financial stability before committing to anything that could put your retirement at risk.

Being supportive doesn’t mean sacrificing your own financial well-being. Helping them become financially independent is the best gift you can give.

Financial Planning for Empty Nesters | Update Estate Planning

Estate planning isn’t just for the ultra-wealthy—it’s a way to make sure your assets are handled the way you want while making things easier for your family.

1. Review and Update Your Will

  • Make sure your will reflects your current wishes.
  • If you don’t have one, now’s the time to get one in place.

2. Check Beneficiary Designations

  • Review beneficiaries on retirement accounts, life insurance policies, and investment accounts.
  • These override what’s in your will, so keeping them updated is key.

3. Set Up Powers of Attorney

  • A financial power of attorney lets someone handle your finances if you’re unable to.
  • A healthcare power of attorney makes medical decisions on your behalf if needed.

4. Consider a Trust

  • If you want to avoid probate and make inheritance easier for your heirs, a trust might be a good option.
  • A financial advisor or estate attorney can help you decide if it makes sense for your situation.

Updating your estate plan now can save your family a lot of headaches later.

Seek Professional Financial Advice

Even if you feel confident in your financial plan, getting a second opinion from a professional can help you fine-tune your strategy.

Financial Planning for Empty Nesters

1. Find a Fiduciary Financial Advisor

  • Fiduciary advisors are legally required to act in your best interest.
  • Avoid advisors who work on commission, as they may push products that benefit them more than you.

2. Get Tax Planning Advice

  • A financial planner or accountant can help you minimize taxes on retirement withdrawals.
  • Strategies like Roth IRA conversions and tax-loss harvesting can help reduce what you owe.

3. Plan for Long-Term Wealth Preservation

  • If you have significant assets, a financial advisor can help you develop strategies to preserve your wealth for future generations.

Having a professional guide you through financial planning for empty nesters can help you avoid costly mistakes and make the most of this new phase.

Final Thoughts

Becoming an empty nester is a major life shift, but it’s also an opportunity to take control of your finances in a new way.

With a few smart moves—adjusting your budget, ramping up retirement savings, paying down debt, reviewing insurance, and getting your estate in order—you can set yourself up for a future that’s financially secure and full of possibilities.

Now’s the time to focus on what matters most to you. Whether that’s traveling, downsizing, or just enjoying financial freedom, smart financial planning will help you get there.

FAQ: Smart Financial Planning for Empty Nesters

1. What’s the first financial move I should make as an empty nester?

The best place to start is by reassessing your budget. Your expenses have likely changed now that your kids are out of the house, so take a close look at your income, savings, and spending. Redirect any freed-up cash toward retirement savings, debt repayment, or other financial goals.

2. Should I downsize my home now that my kids are gone?

It depends on your lifestyle and financial situation. If maintaining a large home feels unnecessary or expensive, downsizing can lower costs and free up money for travel, investments, or retirement. However, if you love your home and can comfortably afford it, there’s no rush to move.

3. How much should I be saving for retirement as an empty nester?

If possible, aim to max out your 401(k) and IRA contributions. If you’re 50 or older, take advantage of catch-up contributions, which allow you to save even more. The goal is to make up for any lost time and ensure you have enough to retire comfortably.

4. Should I still have life insurance now that my kids are independent?

You may not need as much life insurance as before. If you’ve built up enough savings to support your spouse or cover final expenses, you might be able to reduce or drop your coverage. Review your policy and adjust it based on your current financial needs.

5. How do I help my adult children financially without hurting my own future?

Set clear boundaries and avoid sacrificing your own retirement savings. Instead of giving cash, offer financial education, encourage smart money habits, or assist in non-monetary ways. If you decide to help financially, make sure it’s money you can afford to give without impacting your long-term goals.