You might think the time when your last child leaves home is far off into the future, and you’re probably right. But don’t fall into the trap of thinking that it’s so far off you don’t need to think about it because you do. It’s a bittersweet moment because while your kids are leaving to become truly independent, it gives you back the freedom that you haven’t had since before you were parents. An empty home does take a little getting used to, but you shouldn’t dismiss the possibilities and new options it brings.
Time To Retire?
It could be, because one of the reasons why you can’t retire earlier is the expense children bring. Once they leave the nest, their finances are no longer your concern or perhaps, more importantly, your responsibility. You might give them a little nudge through the college years but by this point they really should be standing on their own two feet. They won’t be the constant drain on the bank account that they have been for quite some time now.
So, you might want to check your savings. It’s possible that you have more than enough in the accounts to retire quite comfortably without a second thought to the fixed income that you used to rely on.
If you’re not in a position where you can retire just yet, it may be worth thinking about freeing up some capital, so it is a possibility. There’s one simple way to do this.
Move To A Smaller Home
If you want to free up capital, you should think about moving out of your family home and instead buying a smaller one. Essentially, you should be looking for your retirement cottage and rather than having four rooms, it’s probably only going to have two. You might also consider looking for a bungalow because remember, you’re not getting any younger. While you can climb those stairs with no issues right now as you age, you might find it feels like climbing a mountain.
It is best to handle a home move when you’ve only just gone past middle age anyway. Home moves can be stressful with lots of different bills to consider and challenges to conquer. There’s conveyancing fees, estate agent costs and removal teams that need to be paid. If you get this over with before you retire, you can save yourself from a lot of the stress.
Let’s say that when your kid moves out, you are ready to retire and move to a small home. Immediately, you are saying goodbye to your fixed income, and this is going to free up a lot of your time. However, it’s also going to put pressure and constraints on your finances. If you have big ideas for your retirement, you probably don’t want that. The answer would be to set yourself up with a passive income in the form of investments.
There are lots of passive investments that you can test the water with, but many people choose to invest in property. If you want to invest in property, you should get in contact with a specialist financial advisor. They should be able to help you decide what property to invest in and guarantee that you don’t suffer a loss.
There are two types of property investment. You buy to sell or you can buy to let. A common misconception is thinking that if you buy to let it’s not a passive income. That can be true, but you can also invest in the services of a professional real estate manager. At that point, a lot of the issues of being a landlord are taken off your hand and handled by someone else. As such, it can still be a passive income in every sense of the world. In fact, many people buy a smaller apartment, let it out, giving them just enough of a profit to allow them to have the good life through retirement.
It is worth mentioning that while the kids have moved out, that may not be the end of the support you provide to them, both financially and personally. This generation is going to have a lot of challenges from buying their first home to finding a job that pays enough to survive independently. As such, it is worth making sure that you have enough cash in your accounts to help them out if they need it. If you do this, you can make sure that your kids never end up in a dangerous financial situation.