Lower-income Americans who are looking at retirement may be concerned that they won’t have enough money. Social security is only designed to replace about 40% of your pre-retirement income, according to AARP, so most people will need to supplement it with other income or savings.
One way to generate some extra cash as you’re approaching retirement is to sell things you may not need after you stop working. Here are five things lower-income Americans should sell before retiring.
Your Second Car
Working married couples typically need two cars so they can both get to work. Once retired, however, you may find that one car is enough. Selling one 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 a careful analysis may show that your timeshare costs you more than it saves you. You still need to pay for transportation to the vacation destination. Plus, many timeshare fees outweigh 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 could save in the long run by letting it go.
Heirlooms Your Kids Don’t Want
Selling family heirlooms to fund your retirement may seem harsh, but it can make a lot of sense. You may have fine china, flatware or collectibles that your children don’t want and selling them now could have two benefits. It could free up some extra cash for your retirement and it could save your adult children from having to get rid of them after you’re gone. Check with the kids to see what, if anything, they want and get rid of the rest.
Poorly Performing Investments
Retirement is a good time to look at your investments — you may want to get more conservative as you get older. While you’re at it, take a look to see if you have any investments that have unrealized losses. When you sell these investments, the losses can be claimed on your tax return, reducing the amount of tax you have to pay. Also, look for investments that are not performing as well as others and consider selling those, too.
Your Home
For many Americans, much of their net worth is in their home. By selling your home and buying a smaller home or one in a less expensive community, retirees can generate some cash for their retirement. Another advantage is that property taxes and maintenance costs for your new home may be lower as well.
Some retirees may find that renting is an even better solution after selling their primary residence. While rents are high in many areas, when you factor in taxes, maintenance and other costs, renting may come out on top, so do the math.
It may be difficult to think of selling some of these things, particularly if you’ve had them for years. But ultimately, getting rid of them may help you to enjoy a more comfortable and carefree retirement.
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This article originally appeared on GOBankingRates.com: 5 Things Lower-Income Americans Should Sell First Before Retiring
