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Your children have grown up and moved out—and now you’re free to reclaim your future. As an empty nester, you have a great opportunity to focus on making sure you’re on a strong path to retirement. Here are four financial opportunities to consider once the kids move out.
The estimated average cost of raising a child from birth to age 17 is more than $310,000. This means that once the kids are on their own, you can reevaluate your budget to assess how much you’re spending (or not spending) now, identify areas where you can cut back or spend more, and reallocate funds to new priorities.
Where will your freed-up funds go? Some logical choices include:
Housing is the greatest expense of raising a child. Rather than staying in a home that’s too big for you—and spending 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 lower property taxes, can increase the amount of money you can put away for your future.
There are four compelling reasons to consider an annuity for retirement planning.
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The financial demands of raising children—everything from piano lessons to college funds—may have kept you from contributing as much as you’d have liked to your retirement account. But now that you have an empty nest, it’s a smart time to ramp up your retirement savings.
Experts recommend saving 10% to 15% of pretax dollars every year for retirement. As of 2023, employees can contribute a total of up to $22,500 annually to their 401(k) plans, both Roth and traditional. If you’re over 50 years old, you can contribute a total of up to $30,000 annually.
A retirement calculator can be a helpful tool in determining how much you can plan on having, based on your age, contribution amount and expected rate of return.
Review your insurance and look for places to save while still ensuring that your coverage takes care of your needs.
And, once you’ve determined what your retirement savings needs are, consider adding a financial tool to help you reach them. Life insurance is one such option that can help meet your goals for savings, paying off debt and more.
AAA banking experts can help you develop a plan to meet your financial goals.
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