3 Ways to Grow Savings as an Empty Nester

When the children are away, parents will save. That's long been the belief of financial advisors and economists that study saving habits.

That's not what one of Stephen Brubaker's clients planned to do after their children flew the coop. Brubaker, an advisor at Exit & Retirement Strategies near Denver, discussed with his clients their options after they had succeeded in doing what so many parents want to achieve: paying for their children's education.

Once the children were done with school, though, the two parents wanted to buy a $30,000 truck to celebrate. Why not, right?

[See: 10 Tips for Couples and Young Families to Build Wealth.]

Brubaker's sees this initial desire to spend often in empty nesters. His clients aren't unique in that sense. According to a recent study by the Boston College Center for Retirement Research, empty nesters aren't saving at nearly the rate that experts and advisors expect. When children expenses drop out of the equation, the increase in parents' savings rates are "extremely small," according to the study. In fact, based on previous studies, a two-parent household making $100,000 income, contributing 6 percent of the salary to a 401(k), would be expected to increase that savings by 12 percentage points once the children leave.

But the Boston College study found that, at most, the increase is a 0.7 percent boost in savings.

"Households' financial response to the kids leaving may seem like a matter of personal preference, but it has important implications for retirement preparedness," write the authors of the report. "If households stand pat and maintain their total consumption when the kids leave, they will aim to keep that consumption level in retirement and will have less savings with which to do it."

One reason for this gap is due to an empty nester's desire to spend the freed up money on home improvements, cars, vacations or other long-delayed dreams. Here's how to avoid this mistake and increase savings instead of creating financial trouble.

Sit down with the spouse and set goals. Now that the hours spent planning for a child's future has finished, this is the time for parents to focus on their own goals and needs.

The parents must understand why they're saving, Brubaker says. "The couple needs to find a vision for the future," to create reachable goals.

Whether the goals are to retire at 60, or buy a vacation home, or go on the European vacation, once the goals are defined, then planning for them becomes much more concrete. That's how the budget is created, determining what's available to go toward savings and what's needed for everyday living.

In order to ensure all funds are accounted for, use online tools, like Mint.com, to determine what's automatically getting deducted from the credit or checking accounts each month, Brubaker says. After years of expenses built up from child-related care, there are a number of costs that come off the books. These hidden costs, since they're often automatic deductions, can eat away at the ability to save.

[See: 10 Ways You Can Throw Retail Stocks in Your Cart.]

Stash away the money that used to go toward the children. When the clients of Brubaker no longer had to pay for their children, it freed up $20,000 to $30,000 a year. In their mid-50s, they wanted to use that money to buy the truck, since their current vehicle had about 80,000 miles on it and it needed some repairs.

Instead, Brubaker convinced them to pay $1,800 to repair the vehicle and save the rest. It allowed them to adjust where the money went without ever seeing it hit their checking account, ensuring they don't miss the funds. By taking this tactic, the couple is on track to retire at 61 instead of their mid-60s, even after factoring in a planned remodel of their house.

This time period between freeing up from responsibilities to children and retirement is important because someone older than 50 can increase their rate of savings. Instead of the maximum contribution of $18,000 on a 401(k), the savings rate can be increased to $24,000. This also potentially increases the employer match.

It's the time to look at health care savings options or long-term care safety nets as well. Sheila Padden, an advisor at Padden Financial Planning in Chicago, suggests that couples with two paychecks try to live on just one while putting the other in savings.

While that may not be for everyone, it's a tactic to keep the savings structured, even after the kids are gone.

Financially break away from the kids, if possible. One issue Padden sees often from her own clients is how difficult it is for parents to truly break away from their kids financially. Even when the children have high-paying jobs, she'll see clients continue to pay for the child's cell phones or auto insurance.

"It's really difficult to not support your children," she says. "It's really better for them to let them live under their own salary."

These small payments can also add up, preventing parents from saving as much as they can. And it's worth doing so, since, in a few years, those children could boomerang themselves back into mom and dad's home.

[See: 10 Long-Term Investing Strategies That Work.]

If that happens, then focusing on what matters when the kids first leave, will make the financial impact of their return a little less difficult, Brubaker says.

Ryan Derousseau is a journalist with nine years of experience writing about investing and leadership issues. His work has been read in Fortune, Money, CNNMoney and Fast Company, among other publications. You can find more from him on Twitter @ryanderous.