Empty nesters need to trim expenses—including support of adult children—to better prepare for retirement


Louisville, KY—August 2, 2016—Logic suggests that once kids leave home, their parents have more money to set aside for retirement. Not as much as you might think. While empty nesters do increase their household savings through 401(k) plans, the increases are “extremely small,” 0.3 to 0.7 percentage points, according to the results of a recent study conducted by Boston College’s Center for Retirement Research. “Among the explanations offered for the lackluster increase in savings is empty nesters’ continued financial support of adult children. Picking up their grown kids’ expenses—student loans, insurance, auto payments, smart phone bills—is a generosity those who have not yet saved enough for retirement can ill-afford,” said Carla Dearing, CEO of SUM180, an online financial planning service designed to be simple and affordable.

“Those in their 50s (typically) are ideally positioned to accelerate their retirement savings: They’re at the peak of their earnings, the mortgage is paid and the kids are finished with college and out of the house. As this is possibly their final chance to ensure their retirement is financially stress free, directing more into retirement savings must be their top priority,” Carla continued.

Following are Carla’s tips for empty nesters who’ve not yet reached their retirement savings goals:

Recognize this time for what it is: a window of opportunity.
You owe it to yourself to make these years count. It is never too late to save, and in all probability, you are now enjoying the heftiest earnings of your career to date. The mortgage likely paid and the kids out of the house (hopefully) also free up more funds. The result is you are in a position to take actions that will go a long way towards setting you up for long-term financial security. Do not pass up this chance! To boost your retirement savings appropriately, you may need to rethink your current priorities—including taking the difficult step of reducing or even eliminating financial assistance to adult children. Think of it as putting the oxygen mask on your face first. It may feel counter-intuitive, but, after all, your security in retirement is something your children want for you, too.

Find out exactly how much you still need to sock away – and do it.
Often, having a clearly defined goal is all we need to galvanize us into action. So, if you do not yet have a comprehensive financial plan, now is the time to get one. Your financial plan will tell you, for example, exactly how much you should contribute to your 401(k) this year. If you’re curious what that amount might be, here’s a quick way to get an idea. Consider that your retirement portfolio (stock portfolio plus real estate assets and any rental income) should be 10-15 times your expenses in retirement. Compare that ideal retirement portfolio number to what you currently have saved, and you’ll get a general idea of how much you need to set aside. For example, one client (a realtor) put $38,000 of her commissions into her SEP-IRA in one year. Working with a financial adviser who told her exactly what she needed to save helped her discover that she could, in fact, save that much. The experience was so empowering that the next year she put away $50,000. Another strategy to consider, if you are part of a couple: Can you live on one income and sock away the entire second income? If you can manage it, this enable you to make giant strides toward your retirement savings goal.

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About SUM180

SUM180 is an online financial planning service designed to make financial planning simple and affordable, providing a radical alternative to current financial advisory offerings.

Specifically, SUM180 is differentiated in the following ways:

  • SUM180 meets individuals where they are. SUM180 plans are personalized to help individuals wherever they are right now on their financial journey; whether they’re just beginning, starting over or well on their way.
  • SUM180 plans are simple. Clients need only focus on just three of their most important next steps at any given time. This approach is empowering for most, but especially for those who have been “tuned out” of their financial picture for a period of time.
  • SUM180 doesn’t try to give clients a degree in finance. SUM180 clients don’t need to become financial experts to meet their financial goals. SUM180 provides the tools they need, without overwhelming them with the details they don’t need.
  • SUM180 offers a community for users, unfiltered. SUM180’s community forum allows users to support one another in their plans.
  • SUM180 serves; never sells. Earning and keeping client trust is SUM180’s highest priority. SUM180 never makes money based on the advice provided.

Additional information about SUM180 may be found at https://sum180.com/.

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Robin Schoen
Robin Schoen Public Relations
215.504.2122 office
215.595.7542 mobile