4 financial changes for new empty nesters

The holidays are here and your children may be heading home after recently leaving the nest. This is a transition for many families, and if you haven’t yet, you need to discuss the financial changes you and your spouse should address as a family of two.

“The term empty nester comes with really about that first six to 12 months when your adult child leaves and gets a job and moves on,”says Eric Aanes, president and founder of Titus Wealth Management.

While it can be a fresh start for parents, it also comes with a lot of financial life changes. Aanes shares 4 tips for navigating your new financial reality.

Tip 1: Replenish your savings

If you’ve helped your child get through college and have still managed to continue saving for retirement, you can continue with your savings plan. But for those who took a hit to their savings, it’s time to double down on replenishing your accounts.

“You really need to max out your retirement plans because these are your peak earning years,” Aanes says. “It’s always a good plan to save more and put money away in a tax-deferred retirement plan,” like a 401(k) or IRA, he says. Here are 4 steps to grow your 401(k).

Tip 2: Avoid risky investments

Aanes cautions that risky investments are not the way to go at this stage of life.

“One of the things that you want to be careful of is hot stock tips or speculative real estate investments,” Aanes says. “You oftentimes don’t have the luxury to make it back, so you’ve saved all this money and now if you were to make a bad investment, making it back can be very difficult.”

Aanes says it’s important to continue building your financial foundation and future goals in a responsible way.

“You want to make sure you’re making the right choices; really it comes back to building a roadmap that’s realistic, achievable and sustainable over over your lifetime,” he says. Follow these 4 steps to take before investing in the stock market.

Tip 3: Update your will and estate plan

Take the time to look at your will, trusts, and estate plan, and update them according to the changes that will be going on in your future, Aanes says.

“Updates that you’d be making would be if that adult child is getting married, or if you have grandchildren,” he says. “Any sort of changes that are major changes you would want to make sure that everything is up to date.”

Also take a look at your life insurance and health insurance plans and make adjustments. Updating things that you may have let fall to the wayside when you were caring for a larger family can now take center stage.

Tip 4: Consider other ways to financially help

Just because your child is independent doesn’t mean there won’t be an opportunity to support them, both emotionally and financially, Aanes says.

“As you set those boundaries with your adult child, we also find that we still care for them, we still help them financially, but we do it in a more structured way,” he says.

Aanes says many clients begin setting aside money to help their children pay for a wedding or their first home down the line.

“One of the things that we see is that with the explosion of real estate values, a lot of parents have have stored up wealth,” he says. “They want to help out their adult child, so just because you’re an empty nester doesn’t really get you off the hook—you’re usually going to be helping with that first home.”

If you plan to help your child purchase a home, don’t fall for these common myths.

This story was originally published on November 20th.