Becoming an empty nester marks a significant life transition, bringing both emotional and financial changes.
After almost two decades raising and living with children, parents can find themselves lost after their kids leave the nest so to speak.
With this major life milestone, it’s the perfect opportunity to reevaluate your financial goals and plan for the future. Here are five practical ways to prepare:
Reassess your living situation
As your household size shrinks, consider whether your home still fits your needs. Downsizing to a smaller, more manageable property can reduce maintenance costs, utilities, and property taxes.
Furthermore, if you've been living in your home for years, your house might have appreciated in value over that time, so a downgrade might mean more disposable income for your future.
No matter what you decide, talk to your accountant or financial advisor to see about any potential capital gains taxes that you might incur from selling your home for more than you paid.
Redirect savings from reduced expenses
With fewer mouths to feed, lower utility bills, and less clothes to buy, you’ll notice extra funds in your budget.
Redirect this money into savings, a retirement accounts or even an emergency fund.
If you’re already secure in these areas, consider investing in opportunities like a second property or a diversified portfolio.
If you're really prepared, this might become disposable, which means you can use it for trips, dinners out, milestone experiences and more.
Revisit your financial goals
The empty nest phase is an ideal time to revisit your financial plan with your trusted advisor.
Assess whether your current savings and investments align with your retirement timeline, lifestyle goals, and any travel or hobbies you want to pursue.
A financial advisor can help you adjust your strategies to meet these objectives.
Some parents will see the empty nesting phase coincide with their retirement. That's an especially important time as you might start receiving retirement account distributions.
It's more important than ever to look at your budget and see where your funds are going with all the changes in your life.
Review estate plans and evaluate long-term care options
With your kids out of the house, it's important to also plan for future challenges, such as long-term care and even death.
Make sure your will, trust and other documents are complete and that your adult children know how to proceed in case anything happens to you with them out of the home.
It's also important to make a plan for long-term care as you enter your retirement years.
These plans can be quite expensive, especially as your income starts to become limited with retirement. Make sure all these plans are accounted for, as you don't want to saddle your children with this responsibility.
Invest in yourself or welcome a new family member
With fewer daily parenting responsibilities, now is the time to focus on your own personal growth.
Invest in new skills or start a side hustle like Uber and DoorDash. Financially, this could mean setting aside funds for classes, starting a small business, or exploring new career opportunities.
According to an AARP survey from last year, more than 25% of American over the age of 50 are doing freelance work like these apps.
Additionally, maybe this is the time to welcome a new member of the family! No, not a child, but perhaps you've always wanted a dog or cat, or some other kind of pet.
This is a great way to fill a possible void in your home that as left after your children move out.
For more on personal finance topics
If you have more questions about personal finance topics, visit the Learning Center on TD Bank's website. You can find more TD Bank services at TD.com.
We hope you found this helpful. This article is for informational purposes only and is based on information available as of January 2025 and is subject to change. This content is not intended to be used or acted upon with respect to any client's specific circumstances. For specific advice about your unique circumstances, consider talking with your qualified professionals.