Kids graduated? If so, it's time to focus on your retirement

It's graduation season, which means that millions of young folks are transitioning from one chapter of their lives to the next. While this presents an opportunity for them to start new lives, it presents an opportunity for the parents, as well.

This is an ideal time to reflect upon your life and set some new goals. If you have children finishing college, you are in the unique position of being able to set yourself on a new course that could bring you into great financial security.

Here's the thing: You've had tremendous resources going to your child for the past 22 years, and ideally, you will soon be in the position of no longer needing to support him or her financially. True, it may take a few months — or perhaps even a few years — before they are entirely financially self-sufficient, but the monthly costs of supporting them will likely be dramatically reduced.

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Simply put, the money you've been spending on the kids can now be directed elsewhere. And the decision of what to do with those dollars can have a dramatic impact on your financial future.

As a financial advisor for more than 25 years, I've worked with hundreds of individuals and couples as they've moved into this phase of their lives, and I've seen the contrasts between those people who have used those freed-up funds wisely, and those who have not.

With the kids gone, you are presented with a fantastic opportunity to save for your ultimate retirement. Whether or not you plan to retire in the near future, odds are one day you will retire, and it's imperative that you have the resources to provide for yourself once you get there. If you use this season of life as one to get really serious about saving, you'll put yourself on a path to great financial security — ideally transitioning into a place where your paycheck is an option and not a requirement.

It's tempting to use this freed-up cash to splurge, such as buying that sports car you've always dreamed about. And while some increased spending may be fine, that extra money can actually have adverse consequences. You may find yourself living a larger lifestyle without increasing your retirement savings.

In order to put, and keep, yourself on the path of financial independence, there are five things you should consider at this stage of life:

1. Commit to additional savings before you have a chance to spend freed-up cash. The fact is, too many of us spend whatever passes through our checkbook. The key is to decide upon a savings strategy before you have a chance to spend it. Determine ahead of time how much of the funds (that were going to the kids) will now be directed toward your retirement.

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2. Communicate with the kids that they are on their own. We all love our children and want what's best for them. But what's best for them and what's best for our own financial security — and for the economy — is for them to figure out how to be independent of your pocketbook. Granted, some children have disabilities or special needs that require additional, prolonged or permanent support, but most able-bodied kids would be best served learning how to survive on their own labor.

3. Max out that employer retirement plan. You can contribute as much as $24,000 into a 401(k) plan if you are age 50 or older. Too few of us ever reach that milestone, but from my experience, those who have contributed the most to their employer's 401(k) (or 403(b)) are in the best financial position during retirement.

4. Develop a strategy to get the home paid off. I'm a huge advocate for being debt-free in retirement. After all, the fewer monthly expenses you have during retirement, the less money you need to have saved. Calculate how much you should pay each month so that your home is paid off by the time you reach retirement age. For example, if you are 52 and want to retire at age 65, you'll want to adjust your payments so that your home is paid off in 13 years. There are many online calculators that can help you figure this out.

5. Evaluate your own career. I intentionally saved this one for last because I feel so strongly about it. If you are in a job you enjoy and are in no rush to retire, that's fantastic. But if you are in a career you loathe and are counting down the years until you can retire, that's not only no way to live — it's bad for your mental and physical health.

Now that the kids have launched into independence — or are at least in the process — this is the perfect time to take a good look at your own life. Changing careers, even if it means delaying retirement, may be the most satisfying move you've ever made.

— By Scott Hanson, co-CEO at Hanson McClain Advisors