7 Money Mistakes Empty Nesters Make

Watch out for these financial pitfalls when the kids fly the coop

Maya Dollarhide,

AARP

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En español

Published June 25, 2025

Jon Krause

Elizabeth and Michael Kanna, both in their 60s, became empty nesters in 2024. When their last of three daughters moved out, the Sacramento, California, couple faced an emotional and financial adjustment.

All three girls had lived at home while attending college and into their early 20s. With a newly empty nest, the Kannas are spending money in new ways. “We’re doing a lot of DoorDashing because dealing with dinner is a lot different than when the kids [were] here,” Elizabeth says. Another big change: Their daughters had, at times, paid them rent. Now, that income stream is gone.

There are nearly 21 million U.S. households with empty nests. When kids move out, parents like the Kannas often encounter two big obstacles. Of course, there’s navigating the emotional terrain. Many also run the risk of making financial mistakes, says Anthony Damaschino, author of The Empty Nest Blueprint.

Here are seven common but avoidable money missteps empty nesters make.

1. Not re-evaluating your household budget

Now is the time to reassess your expenses. With fewer people under your roof, your grocery bills are likely to come down (along with your water bills if your kids fancied long showers).

Re-evaluating your budget can help you better manage your new cash flow. For example, if you’re no longer paying fees for high school sports, clubs and other extracurriculars for your teenager, you could direct that money into your retirement accounts or use it to bulk up your emergency fund.

2. Overindulging

It’s natural to feel tempted to start embarking on expensive new hobbies or take ambitious trips you put on hold when your kids were home. But be cautious, Damaschino says.

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“Sometimes, empty nesters think their newfound freedom and empty-nest lifestyle equals a blank check, and they say, ‘Oh, I always wanted to redo the master bathroom,’ or ‘I’ve always wanted to go to Europe,’ and they forget that those bucket list items come with expenses,” he says. He recommends taking a beat before making a big purchase. Ask yourself: Is this something I really need? If it is, are there any less-expensive options that can help you save money?

3. Overlooking changes to your taxes

You may be surprised come your first tax season as an empty nester, says Jack McCloskey, a certified financial planner and director at Mercer Advisors in Ann Arbor, Michigan. “If you were claiming a child as a dependent and getting a tax credit, you might not anymore,” he says.

4. Bankrolling your adult child’s lifestyle

Many parents continue to support their kids when they leave the nest, contributing money toward their rent, cellphone bill or other expenses. That’s OK, financial advisers say, but footing all of your child’s living expenses isn’t a wise move, especially if you’re draining your nest egg to do it.

“Sometimes people put a lot of money and effort into their children but at the expense of their own futures and their own retirement,” says Cheryl L. Evans, director of the Lifetime Financial Security Program at Milken Institute, a nonprofit health and finance think tank.

Set specific guardrails around your financial assistance; if you don’t, you could become a money spigot that doesn’t turn off, potentially putting your retirement security at risk.

5. Waiting too long to downsize

Do you still need a five-bedroom house now that you’re empty nesting? Probably not. “Delaying downsizing and staying in a home longer than maybe you should or plan to, especially if your kids aren’t going to come back, means you can end up paying for the cost of a larger home that you don’t need,” says Damaschino.

When you’re ready to put your house on the market, don’t rush. Before listing, take the time to make necessary repairs, and consider improvements that will deliver a strong return on investment. If you’ve been there for decades, modernizing the property could make it more appealing to today’s buyers and increase the sale price.

6. Overdoing it on home renovations

Sometimes, over-eager empty nesters turn their focus to all of those home improvements they’ve been dreaming of for years and try to tackle them all at once. ”As soon as the kids move out, you say, ‘Let’s redo the bathroom, let’s redo the backyard, let’s change the kids’ room into a yoga studio,’” Damaschino says. But costs for remodeling projects can spiral out of control if you’re not careful.

Start with one or two home renovations. Before beginning a project, take the time to price out the work and determine whether it aligns with your budget. If you plan on staying put as long as you can, consider concentrating on renovations that will help you age in place, such as installing a walk-in shower, adding more overhead lighting for better visibility or widening doors to accommodate walkers and wheelchairs.

7. Ignoring your long-term financial plan

When you become an empty nester, it may be tempting to focus squarely on the present, like turning junior’s bedroom into a home gym. That’s a mistake, Evans says: “You really need to visualize what you want your life to look like, to understand how you’re going to fund it.”

Revisit your retirement goals and plans, McCloskey says. You might need to make some adjustments. For instance, if you haven’t been making contributions to your retirement account because you were prioritizing your kid’s college fund, consider making catch-up contributions to your IRA or 401(k).

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