Sell These 5 Things Before Retiring, According to Kevin Lum

Retirement is a big life change. But it’s not just about leaving the workforce; it’s also a chance to rethink what you hold onto.

“We often have more than we need. And sometimes there [are] things we can’t get rid of or won’t get rid of [that] begin to weigh us down,” Kevin Lum, certified financial planner, said in a YouTube video.

According to Lum, this is where retirement can be a valuable gift.

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“It’s one of those moments in life when you have a chance to hit the reset button to step back and ask, ‘What do I really want to keep? What do I want to take with me into the next stage of life?'” Lum explained.

In his video, Lum shares five things he recommends letting go of before stepping into retirement.

House That’s Too Big

The biggest and most obvious is the house that’s too big, Lum said. You may not need as much space once the kids are grown, and downsizing can mean lower maintenance costs, property taxes, utility bills and potentially more freedom, he said.

An analysis from Moody’s Analytics found that nearly 6 million older Americans live in homes far larger than necessary. For many, that extra space also represents untapped value, and downsizing is one option to release some of that home equity.

The National Council on Aging (NCOA) reports that homeowners age 65 and older hold a median of about $250,000 in home equity.

According to Lum, tapping into that home equity could mean more cash flow, funding your travel plans,  investing it for future income or as a legacy for future generations. It could also prevent you from withdrawing as much from your IRA and keep you in a lower tax bracket.

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Your Second or Third Car

If you aren’t commuting, you may not need more than one vehicle. By selling your car, Lum said you can reduce your insurance, registration fees and maintenance costs.

While this may not be an option for everyone, it can help free up cash in your budget, especially as insurance costs rise. A Forbes analysis of national averages found that the cost of auto insurance per year was 33% higher in 2024 than in 2021.

Overly Complex or Investments With High Fees

As you enter retirement, Lum recommends selling overly complex investments or those with high fees. For example, an old variable annuity with layers of fees, a whole life policy that you’ve been paying on for decades or a mutual fund that’s charging over 1% per year.

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These instruments often have higher fees, Lum explained, but they also add complexity to your life.

“In retirement, simplicity and cost efficiency win most of the time,” Lum said.

Unused Toys

Do you have any unused RVs, boats, ATVs or motorcycles? According to Lum, these lose value over time and they often come with ongoing costs.

“Selling them can give your retirement a little financial boost of cash that could help you build up your retirement fund or maybe pay off some debt,” Lum said.

Side Business or Rental Property

A side business or rental property can provide an additional income stream, but Lum said they can sometimes become time-consuming, stressful and an illiquid stressor.

“Sometimes selling, particularly when the market is strong, can turn complexity into simplicity,” Lum said.

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