Retirement is no longer a distant dream for Gen Xers. It’s getting closer every year. This reality check means it’s the time to prepare for a more stable retirement.
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One of the best ways to prepare isn’t just by saving more but by downsizing assets that quietly drain your wallet year after year. It may hurt to let go of things you’ve worked hard for, but it will save you money during retirement. Below are six assets every Gen X should downsize as they approach retirement.
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House
For many Gen Xers, the home is their biggest asset. While it may hold decades of memories, a larger house often means higher costs, including property taxes, insurance, utilities, maintenance and repairs.
As you approach retirement, these ongoing expenses will eat into your savings. Downsizing to a smaller home can lower your expenses and free up cash you can use to boost your retirement savings or reduce debt.
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Vacation Home
Owning a vacation home may seem like the best retirement goal. However, it can quickly turn into 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 you’ve paid off the mortgage, ongoing maintenance and repairs can drain funds that would have covered your everyday retirement needs.
Instead of owning, consider renting a vacation home when you want to go on a vacation. This way, you won’t be covering expenses for a property that sits empty almost all year. Additionally, you won’t be tied to one location when going on a vacation.
Extra Vehicles
Having more than one car may have been practical years back when raising a family. But as kids grow and move out, you may no longer need more than one or two cars. Even if the vehicle sits in the driveway, it’s still costing you money in insurance, registration fees and maintenance.
Selling unused cars before retirement can provide immediate cash to boost your emergency fund or cover other important expenses. In fact, couples who can share one reliable car can save thousands of dollars each year.
Boats and RVs
For many Gen Xers, owning a boat or an RV is a symbol of success. But the reality is that these assets often cost more than the enjoyment they provide. Beyond the purchase price, you’ll incur recurring expenses, such as insurance, registration, gas, storage, maintenance and repairs.
As you approach retirement, these costs can deplete your savings faster. A boat sitting idle in a marina or an RV that only gets used a few times a year may drain thousands of dollars annually. Consider selling and renting an RV or a boat whenever you need it.
Collectibles
If you have a collection of collectibles, like rare coins, antiques, sports memorabilia or rare items, you could be sitting on assets worth thousands of dollars. While letting go of these items might be hard because they hold sentimental value, selling lets you convert them into liquid funds that can support your retirement needs. And you don’t have to sell all of them. You can keep a few sentimental items but downsize the collection.
Underperforming investments
Not all assets in your portfolio will perform as expected. Some investments will underperform, others will have high management fees and a few may no longer align with your risk tolerance. Holding onto these investments will quietly erode your nest egg over time.
For Gen Xers, this is the 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.
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This article originally appeared on GOBankingRates.com: Top 6 Assets Gen X Should Downsize Before Retirement — Even If It Hurts
