5 Things Gen X Should Consider Selling as They Approach Retirement
It can be hard to believe that Gen X, aka The Reality Bites generation, is approaching retirement — but it’s true!
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As Gen X enters their 50s and 60s, retirement planning includes more than just saving. It also means reducing expenses and freeing up cash by selling off unneeded assets.
If you own something that’s not, as Marie Kondo says, sparking joy, you should consider off-loading it for cash that will help you ready yourself for retirement. Getting rid of the old to make way for the new? What could be more Gen X?
Here are five things Gen X should consider selling as they approach their retirement years.
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Real Estate
Many Gen Xers purchased real estate thinking about growing families or vacation getaways. But if the kids have left home, that real estate may now feel like too much.
Selling off extra properties provides an income that can be added to retirement savings. It also reduces ongoing expenses like property taxes, homeowner association fees, maintenance and utilities.
“Gen X might find themselves with more real estate than they need, such as large-family homes or vacation properties,” said Taylor Kovar, CEO and founder of Kovar Wealth Management.
“Selling these can not only provide a significant boost to retirement savings but also reduce ongoing maintenance costs and property taxes.”
Holding onto the larger properties you’re not fully utilizing not only creates unnecessary costs but also leaves equity tied up that could be freed for the retirement years, whether to purchase a smaller, more retirement-friendly property, or to bolster your investments.
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Furniture and Household Goods
While you’re downsizing real estate, you should also look critically at what’s inside that real estate.
The truth is: Retirement living will most likely require fewer furnishings and items. Holding onto excess furniture, decor and more creates clutter and moving/storage costs.
“Downsizing often means moving to a smaller, more manageable living space,” Kovar said. “Selling excess furniture and household items not only generates extra cash but also simplifies the move.”
Reducing household goods provides dual benefits. Yard sales or consignment sales can earn some money to save or spend in retirement. Getting rid of excess also makes rightsizing homes much easier and less stressful.
Only keeping essential, beloved items in a smaller retirement home or apartment keeps life simplified.
An Extra Car
Many Gen X families hold onto two cars or trucks out of habit. But it’s smart to reevaluate your vehicle needs as retirement approaches.
If your household can get by with one reliable vehicle, selling the other provides a nice cash infusion while also saving on registration, taxes, maintenance and insurance costs.
“If a two-car household can comfortably transition to one, selling a vehicle can provide immediate cash and reduce insurance, maintenance, and fuel costs,” continued Kovar. “This is particularly relevant for urban dwellers with access to public transportation.”
Whether the cash from selling goes into retirement savings or toward your immediate spending, it still makes good use of that old minivan.
Underperforming Investments
Retirement requires a stable nest egg, and you should be regularly rebalancing your portfolios and selling off any underperforming assets.
As Kovar said, “Reviewing investment portfolios and selling off stocks or funds that are underperforming or in industries that are in decline can be a wise move. The proceeds can be reinvested in more stable, income-generating assets suitable for retirement.”
This retirement-focused portfolio review allows you to redirect assets to more profitable, less risky securities. By keeping money in underperforming stocks and funds, you’re not only reducing your retirement income, but you’re leaving your principal exposed to potential losses.
A Business
You may have started businesses or retain partial ownership in one. As retirement nears, it can become challenging to maintain these commitments. Consider divesting by selling the company or transferring ownership to someone else.
“Retirement might be the time to consider selling or transferring these interests, especially if they require active management,” said Kovar.
This allows you to gain a healthy payout from the years of effort you spent building the business. Removing your responsibilities to your company allows you to relax and enjoy your retirement.
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