Here's something I didn't know until I started running the math. After you retire and before required minimum distributions start at age 73, a lot of retirees pay zero federal income tax on long-term capital gains. The rate is zero. For 2026, the income threshold is $98,900 for a couple. Plenty of people I talk to have never heard of that, so they sold a house, cashed out retirement assets, or did a Roth conversion at the wrong time and left money on the table. The things to sell before you retire deserve thought, and so does the calendar you sell them on.
Start with the house
This is the biggest financial decision a lot of people make in retirement. Some estimates put the average cost of home ownership above $20,000 a year, covering property taxes, insurance, utilities, maintenance, and general upkeep. That's before any mortgage payment, and it climbs as the house gets older.
Then there's the equity. In major metro areas, the average person who downsizes frees up around $196,000. That money is sitting in your walls doing nothing for you, and it isn't replacing your salary.
The tax treatment on a primary residence is generous. The exclusion is up to $250,000 if you're single and $500,000 if you're married filing jointly, completely tax free. The catch is the residency rule. You have to have lived in the house as your primary residence for two of the five years before the sale closes. Move out and rent it, let a family member live there, or turn it into a second home for more than three years, and the exclusion is gone. Sell while you're still inside that window.
Say you take that $196,000 and put it somewhere that pays you. In bonds earning 5%, that's $9,800 a year, roughly $820 a month from equity you weren't using.
The second car
AAA tracked the full cost of owning a vehicle in 2024 and the average came to $12,297 a year, including depreciation, insurance, gas, maintenance, and financing. Two cars averages $24,594 a year.
The question worth sitting with is how much that second car will actually move once you stop commuting. A lot of retired couples drive it twice a week. Spending $200 a month on Uber comes to $2,400 a year against more than $12,000 to own the car, so you're saving close to $10,000 by not having it.
A car sitting in the driveway still costs money. Insurance, registration, and basic maintenance run $3,000 to $5,000 a year at minimum. Paid off doesn't mean free. If you're on the fence, run a 90 day test and live with one car. Problems will show up quickly, and if none do, you have your answer.
The boat, the RV, and everything in storage
Take the cost of owning something for a year and divide it by the number of times you use it. A boat that costs $5,000 a year in slip fees, insurance, and maintenance, taken out ten times, costs you $500 every trip. Seen in those terms, a lot of people decide it isn't worth it. Storage units are the biggest offenders, running $100 to $450 a month for things you rarely touch.
There's also a piece that never shows up on a spreadsheet. People hold onto things based on who they used to be. The boat from when the kids were little. The golf clubs from before the knee injury. Keeping them has less to do with the hobby than with letting go of that version of yourself. That's a real feeling, and it's still worth separating from the math. Simple rule: if you haven't used it in more than 12 months, it's a storage fee.
I'm not telling you to sell everything. Keep what matters to you. On collections, jewelry sold on consignment usually brings 65 to 85 cents on the dollar, which is solid compared with most liquidation options.
Life insurance that protects nobody
People skip this one, and it's an expensive line item going forward. Think about why you bought the policy. There was a mortgage to cover and kids at home living on your income. If the kids are grown and supporting themselves and the mortgage is paid off, ask who the death benefit is protecting now. Often the answer is nobody.
For term life the math is straightforward. A $3,000 a year policy that protects no one costs $30,000 over the next decade of retirement, and those premiums are gone.
Whole life gets more complicated. With cash value you have options. You can surrender the policy and take the cash, which means ordinary income tax on any gains above what you put in. You can do a life settlement, selling the policy to a third party, which carries different tax treatment than a surrender and is worth looking into if the policy is large enough. Or you can borrow against the cash value, and because it's a loan it doesn't trigger the taxes a surrender does. If you have $50,000 or more in cash value, talk to your CPA or a fee only advisor before you move. Insurance protects dependents. When nobody depends on you, paying premiums is a habit.
The timeshare
Timeshares look better on the day you buy than any day after. Average maintenance fees run $1,260 to $1,480 a year and rise 5 to 8% annually, and they almost never go down. A $1,500 fee rising 6% a year comes to $34,000 in maintenance across 15 years of retirement, on top of whatever you paid for the timeshare in the first place.
Resale value is close to nothing. Go to eBay and look up timeshares, there are listings for a dollar. Try to exit through the company and you'll pay exit fees of $4,000 to $12,000. That feels backwards and it is, and that's the timeshare market as it stands today.
What traps people here is sunk cost thinking. We've already paid so much, so we should keep using it to get our money's worth. That money is spent either way. The only decision left is whether to keep paying the maintenance fees. Legitimate exits include deed back programs if your resort offers one, donations to certain charities with a limited tax benefit, and reputable exit companies. Wesley Financial comes up often in this space, and do your research before paying anyone.
The tax valley decides your timing
There's a stretch I call the tax valley. It starts with your last paycheck and runs until Social Security kicks in or your required minimum distributions start at 73, and your income taxes during it can be the lowest they have ever been.
For 2026, a single person can have up to $49,450 of income and a married couple up to $98,900 and still pay 0% on long-term capital gains, meaning anything held longer than a year. Sell appreciated assets inside that valley and you can owe very little or nothing. That's the tax code used deliberately, and planning the timing means keeping more of what you earned.
Two warnings. Capital gains count as income in the provisional income formula for Social Security, so a large gain can push you past the threshold where up to 85% of your benefit is taxed. Medicare works the same way, where gains can lift your income above the IRMAA thresholds and raise your Part B and Part D premiums. Those thresholds are listed on ssa.gov and change every year. Check how a sale affects your full tax picture before you take the gain.
Together, these five can run $30,000 to $50,000 a year in spending you don't need once you're retired. Start with the one costing you the most and giving you the least, and run the 90 day test where it applies.