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Retirement is a new stage of life and warrants some changes — both big and small.
“Preparing for retirement is a great time to take an inventory of your balance sheet to make sure that what you own is aligned with what’s most important to you,” said Joseph Eck, CFP, owner and financial planner for StageReady Financial Planning.
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Eck said he advises his clients to look at everything they own as a resource and to ask, “What role do I want this to play in my financial life moving forward?”
“This can be a powerful exercise in realizing that you own things that maybe don’t matter to you and could be better used by selling or donating them,” he explained. With that in mind, here are five things you should consider selling in retirement.
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Family Home
Dennis Shirshikov, head of growth at Summer and a professor of finance and economics at the City University of New York, said that when boomers retire, downsizing and decluttering can provide both financial and emotional benefits.
“One of the first things to consider selling is the family home, especially if it’s larger than needed,” he said. “Maintaining a big house can be costly in terms of utilities, taxes and upkeep. By selling, retirees can free up significant capital that can be redirected into income-generating investments or used to purchase a smaller, more manageable property.”
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Second Vehicle
Shirshikov said another item to consider selling is a second vehicle.
“With reduced commuting and possibly fewer household members, the need for multiple cars diminishes,” he said. “Selling a second vehicle not only provides immediate cash but also reduces ongoing expenses like insurance, maintenance and registration fees.”
Collectibles or Other High-Value Items
“Boomers might also look at selling collectibles or high-value items that have been accumulating dust,” suggested Shirshikov. “Whether it’s art, antiques or jewelry, these items often hold more value as cash than as decor in a home that might be downsized.”
David Fritch, attorney and owner of Fritch Law Office and CPA practice, added, “Whether art, antiques or other collectibles, these types of assets often gain value over time. Selling high-value collections opens up funds that can be invested to provide income and growth for a comfortable retirement.”
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Businesses
“Selling allows boomers to access the equity they’ve built up over years of hard work,” said Fritch. “The proceeds can generate income through smart investments to fund their retirement.”
Rental Property
“Property values have likely appreciated substantially,” explained Fritch. “Selling means boomers can free up that capital and avoid the hassles of being a landlord in their retirement years.”
What Should Boomers Do With the Money They Receive?
Shirshikov said the smartest move for boomers to make with the money from these sales is to reinvest it into diversified, income-generating assets that align with their retirement goals.
“This could mean putting the proceeds into dividend-paying stocks, bonds or real estate investments, like REITs, which provide regular income streams with potentially lower risk,” he explained.
Eck said that if boomers sell something that no longer aligns with their values, the best place to put the proceeds is in a place that does align with their values.
“A great example would be downsizing a large home that you raised kids in to make your monthly budget less stressful on a fixed income,” he said. “You want a nice house but don’t want such a large monthly expense as it keeps you up at night. Step one would be to use the proceeds of your old home to pay for your new home so that you don’t have a monthly payment to worry about. The next step might be to pad your cash accounts if you are worried about your monthly expenses.”
He concluded, “Regardless of where you put the money, it should be in a place that fixes a pain point for you and better aligns with what’s most important.”
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This article originally appeared on GOBankingRates.com: 5 Things Boomers Should Probably Sell in Retirement
