Empty Nesters: Tips to help protect your nest egg

Published on August 16, 2019 | 3 min read | Webster Bank

Financial planning advice for your new chapter

It’s a bittersweet moment: the day you finally have an Empty Nest. You may have extra time to pursue your passions—and extra space you don’t need.

Many of the financial responsibilities of parenthood are over, but new ones await—including retirement. We offer some helpful considerations for your money and your new life:

Five steps to take right away

1. Redo your budget. This is a perfect time to take a fresh look at your expenses and your immediate plans.
2. Next, review your goals: What do you want to be doing five, ten and fifteen years from now? Compare your wish list to your retirement funds. See where you need to make adjustments.
3. Reduce your credit card debt and other liabilities, great or small. (Don’t forget to take your children off your auto policy now that they’re on their own.) Level your financial playing field as you begin a new chapter in life.
4. Do you plan on providing financial help to your adult children, even as they start nests of their own? Arrive at an annual figure that can fulfill your wishes without upsetting your budget.
5. Are you thinking about buying a new home? Talk to your financial advisor and mortgage professional to see what role real estate assets can play in your retirement picture.

The case for downsizing

Now that the nest is empty, will the extra space be worth the taxes and home maintenance costs you pay? Do you plan to travel or become a snowbird, leaving it for months at a time?

Factor in the cost of upkeep, including preparing for emergencies while you’re away—adding a back-up generator, for example, in case of ice storms and power outages.

Many people choose to move to a one-story house, so climbing stairs doesn’t pose a problem as they grow older.

Considering a 55+ community? If you have health concerns in the family, see what form of continuing care, if any, they provide. Avoid having to make a second move later in life.

Even on a fixed income, don’t assume you can’t afford a new home. Today, housing options are more affordable, likely with lower down payments than when you bought your home. In fact, it’s common now for people to retire with a mortgage. Get the facts before you decide.

Webster helps remove much of the stress of home buying by offering fully underwritten mortgage pre-approval. You can gain peace of mind, knowing your loan is ready to go, even before you start house shopping. You’ll have a much tighter fix on the homes you can afford.

The case for renovating

If you renovate the house to sell, remember that a $25,000 kitchen remodel will not necessarily add $25,000 to the value of your home.

What if you love where you live and plan to stay there? Will you turn that spare bedroom into your personal yoga studio? Or will you need to add wider doorways and safety features for later life?

Look into new financial options that give you more home improvement power, such as a Construction Second mortgage, enabling you to take an equity loan against the improved value of your home, even before construction begins.

Tap the experience of a specialist.

Change is stressful—even positive change. It’s easier to transition into this new stage of life when you draw from the experience of others. For decades, Webster Bankers have guided Empty Nesters as they put their plans in order.

When you take concrete steps to map out the years to come, you can feel more confident and have more control. Let us help you fill in the brushstrokes of your big picture, so you can move forward faster. Contact a Webster Banker today at 800-325-2424 or stop by your local branch.