Born between World War II and the mid-1960s, baby boomers or boomers are the generation nearing or settling into retirement. As someone in retirement, if you think of selling your assets to improve cash flow, you should evaluate your options thoroughly. While some assets should be preserved for long-term financial stability, you should keep some to enhance your quality of life.
We have researched various online forums to create a list of 12 things boomers should not sell in retirement.
Life Insurance
One major downside of selling your life insurance policy after retirement is that your heirs or beneficiaries may receive little or nothing. The sale’s extra value is also subject to higher taxes, including both ordinary income and capital gains taxes. Instead of entirely selling the policy, consider alternatives such as partial surrender or taking out a policy loan to preserve some value for your beneficiaries.
Home
A retired homeowner faces additional expenses while selling, such as real estate commissions, repairs, maintenance, and moving costs. If you’ve owned a home for a long time, you may find that your mortgage is lower than the contemporary rent prices. Consider alternatives like a reverse mortgage or downsizing to cash out on your property without incurring additional costs. Owning a home will benefit you in the long run as its value appreciates.
Gold
Baby boomers should weigh their options before selling gold and other precious metals. These assets often provide a hedge against inflation and market volatility, helping maintain wealth over time. They can offer financial security during economic downturns and play a vital role in a diversified investment portfolio. Selling them might forfeit valuable protection against economic uncertainty. It could impact long-term financial stability, especially if their value grows over time.
Elevated Stocks
Selling stocks with significant capital gains may seem like a good retirement move. Still, it often results in high capital gain taxes. Consider other options before selling appreciated stocks. Even a minor capital gains tax is less favorable than having no tax. Your heirs may benefit from a stepped-up value. Alternatively, you can donate the stocks to charities, avoiding capital gains tax altogether. However, this may not apply if you need the funds for cash flow.
Pension Plans
Boomers should avoid selling their pension plans, as these provide a dependable income that supports financial stability during retirement. Instead, consider using pensions to diversify your income sources. Selling a pension could result in losing a guaranteed future income stream, potentially leading to financial instability. Keeping your pension plan is needed to ensure long-term financial security and a comfortable retirement without the risk of losing income.
Business Interests
You’d do well to retain your business stakes, even when you’re retired since they provide a steady flow of income when you don’t have a day job. Additionally, having a stake in the business can keep you engaged and active post-retirement. Not only does it allow you to stay connected with the professional trends, but it also offers financial benefits and a sense of purpose in your retirement years.
Social Club Membership
Since it’s essential to keep yourself engaged in various activities after retirement, you should continue to remain a part of book clubs or any other social clubs that you’ve been a part of. It’s not ideal to give away your memberships in your early 60s and 70s. These connections keep you in the social circle and offer something to look forward to. Continuing with these activities ensures that your retirement remains fulfilling and lively.
Cherished Objects
You may regret it later if you sell some of your cherished objects for cash when you retire. These items often hold significant personal value beyond their monetary worth. Once sold, they are challenging to recover, potentially causing distress. It’s important to consider alternative financial solutions like getting a loan against these possessions that do not involve completely parting with meaningful objects, ensuring that personal and emotional well-being is preserved while addressing financial needs.
Collectibles
Limited-edition vintage stamps, classic comic books featuring the most popular characters, and other collectibles in their original packaging are almost always very rare to find. They get rarer over time, too. The memorabilia of pop-culture phenomena sell for thousands and are invaluable to most fans. Not selling these items when you’re retired is crucial for your emotional health, and you can pass on their value to future generations as well.
Fitness Equipment
When you exercise, you support your physical and mental well-being. It keeps you from ailments and helps you feel younger. Retirement offers you extra time to prioritize your health. When you’re active, it reduces age-related health concerns and boosts your overall quality of life. By staying active, you maintain your health and also enjoy a more dynamic and satisfying retirement.
Musical Instruments
Practicing music not only reduces stress but also enhances creativity and can be therapeutic. Even if you’re doing it just for fun, music can be enriching. It helps keep a sharp mind, especially during your post-retirement years. If you’ve been strumming the guitar or playing the piano, you shouldn’t give them up in retirement. It would help if you kept nurturing your passion for music, as that can boost your mental health as well.
Gardening Tools
Gardening is a beautiful way to keep yourself engaged when you’re retired. It lets you spend more time outdoors and enjoy fresh air. Moreover, growing your vegetables in a home garden can save you money. You can add a variety of flowers and veggies to your home by using your gardening kit. Seeing your plants thrive also brings a satisfying sense of accomplishment. Consider these factors before you bid goodbye to your gardening tools and supplies.
