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Low-income Americans who are looking toward retirement may worry that they won’t have enough money. Social Security is only designed to replace about 40% of your pre-retirement income AARPSo most people will need to supplement this with other income or savings.
One way to generate some extra cash as you approach retirement is to sell things you won’t need once you stop working. Here are five things low-income Americans should sell before retiring.
your second car
Working married couples usually need two cars so that they both can go to work. However, once you retire, you may find that one car is enough. Selling a car will not only generate some cash that you can use in retirement, but it will also save you money on things like insurance and registration fees.
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your timeshare
If you have a timeshare, you may think you’ll use it even more in retirement. But careful analysis may reveal that your timeshare is costing you more than it is saving you. You will still have to pay for transportation to the vacation destination. Plus, many timeshare fees exceed the value you get from them, costing you money in the long run. If you can sell your timeshare, that’s great, but even if you don’t get any money for it, you may save in the long run by letting go.
Inheritance items your children don’t want
Selling a family heirloom to fund your retirement may seem drastic, but it can make a lot of sense. You may have fine china, flatware or collectibles that your children no longer want and selling them now can have two benefits. This can free up some extra cash for your retirement and it can save your adult children from having to get rid of them after you’re gone. Ask the kids what they want, if anything, and get rid of the rest.
underperforming investments
Retirement is a good time to consider your investments – you may want to be more conservative as you age. While you’re at it, take a look to see if you have any investments that have incurred unrealized losses. When you sell these investments, losses can be claimed on your tax return, reducing the amount of tax you pay. Also, look for investments that are not performing as well as others and consider selling them.
your home
For many Americans, most of their wealth is in their home. By selling their home and purchasing a smaller home or a home in a less expensive community, retirees can generate some cash for their retirement. Another benefit is that property taxes and maintenance costs for your new home may also be lower.
Some retirees may find that renting after selling their primary residence is an even better solution. While rents are high in many areas, the rent can come out way over the top when you take into account taxes, maintenance and other costs, so do the math.
It can be difficult to think about selling some of these items, especially if you’ve had them for years. But ultimately, getting rid of them can help you enjoy a more comfortable and carefree retirement.