Downsizing for a Secure Retirement: 6 Assets Gen X Should Sell Before Retirement

As a finance expert with experience at Bloomberg, I would recommend that Gen Xers consider downsizing certain assets before retirement, such as their house, vacation home, extra vehicles, boats, and RVs, to reduce ongoing expenses and free up cash for retirement savings. Owning these assets can lead to higher costs, including property taxes, insurance, utilities, maintenance, and repairs, which can drain funds that would have covered everyday retirement needs. By downsizing, Gen Xers can boost their retirement savings or reduce debt, ultimately leading to a more stable retirement.

As Gen Xers inch closer to retirement, it's crucial to review and potentially downsize certain assets to reduce ongoing expenses and boost retirement savings. This strategic approach can lead to a more stable and financially secure retirement.

House
For many Gen Xers, the home is their largest asset, but it also comes with significant ongoing costs such as property taxes, insurance, utilities, maintenance, and repairs. Downsizing to a smaller home can significantly lower these expenses, freeing up cash that can be used to bolster retirement savings or reduce debt. According to a recent article [1], downsizing can be a practical way to prepare for retirement by reducing monthly expenses.

Vacation Home
Owning a vacation home might seem like a dream retirement goal, but it can quickly become a financial burden. Between mortgage payments, property taxes, insurance, and travel costs, a second home often becomes more expensive than it’s worth. Even if the mortgage is paid off, ongoing maintenance and repairs can drain funds that could cover everyday retirement needs. Instead of owning, consider renting a vacation home when needed. This approach allows you to enjoy vacations without the constant financial burden of a second home [1].

Extra Vehicles
Having more than one car may have been practical when raising a family, but as children grow and move out, the need for multiple vehicles often diminishes. Even if the vehicle sits in the driveway, it still incurs costs in insurance, registration fees, and maintenance. Selling unused cars before retirement can provide immediate cash to boost the emergency fund or cover other important expenses. Sharing one reliable car among family members can save thousands of dollars each year [1].

Boats and RVs
Owning a boat or an RV is often seen as a symbol of success, but these assets can cost more than they’re worth. Beyond the purchase price, recurring expenses such as insurance, registration, gas, storage, maintenance, and repairs can deplete savings faster. As retirement approaches, these costs can become a significant financial strain. Selling and renting a boat or RV when needed can help avoid these ongoing expenses [1].

Collectibles
If you have a collection of collectibles, such as rare coins, antiques, sports memorabilia, or other rare items, you could be sitting on assets worth thousands of dollars. While it might be hard to let go of these items due to their sentimental value, selling them can convert them into liquid funds that can support retirement needs. You don’t have to sell all of them; keeping a few sentimental items is also an option [1].

Underperforming Investments
Not all assets in your portfolio will perform as expected. Some investments may underperform, have high management fees, or no longer align with your risk tolerance. Holding onto these investments can quietly erode your nest egg over time. For Gen Xers, it’s time to take a close look at your portfolio and sell stocks, funds, or crypto investments that no longer fit your financial goals. Use the proceeds to invest in more stable investments like index funds or dividend stocks [1].

Conclusion
Downsizing certain assets before retirement can help Gen Xers reduce ongoing expenses and free up cash for retirement savings. This strategic approach can lead to a more stable and financially secure retirement. By reviewing and potentially downsizing assets such as the house, vacation home, extra vehicles, boats, RVs, and collectibles, Gen Xers can make significant strides towards a comfortable retirement.

References:
[1] https://finance.yahoo.com/news/top-6-assets-gen-x-110443545.html