Have all of your little baby birds left the nest? Today, we discuss the kind of financial decisions you may make in this next stage of life.
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As your children go off to college, trade school, or work and leave your home, what do you need to know about empty nest syndrome? What are some major financial issues you might face in this time of life?
Many young adults will head off to college. Remember, that you can finance anything but retirement. You don’t want to spend all of your retirement funds on college for your kids. It’s better to take on some loans and pay off college over time rather than giving up that compound effect on your retirement savings.
As your kids get jobs and money of their own, it’s good to help them understand the importance of saving for retirement. A Roth IRA might be an easy way to go. The money doesn’t always have to come from them. You can put money in their Roth IRA as long as they have earned income.
This may be a great time to save up money for your own retirement. You may be eligible for catch-up contributions and find yourself with more money to save now that the kids are out of the house. This might be a transition process as your kids continue to stay on your cell phone plan or car insurance since it’s cheaper as a family.
After the kids are off on their own, you may start to evaluate your own home. Is now a good time to downsize? Consider the costs to carry your house between taxes and maintenance. Do you want the upkeep and the space? Or are you wanting to get something without stairs or have the flexibility to travel? It may make sense to sell your family home or it may make sense to stay. Reach out to an advisor to see what makes the most sense with your plan, and enjoy this new phase in life!
“It’s okay to help them as long as you’re not sacrificing helping yourself. If you can afford both, that’s fine, but you also want to teach them to be independent, too.“
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