smart spending

Is your storage unit eating your retirement savings?

Storage unit full of boxes | NoDerog/E+/Getty Images

NoDerog/E+/Getty Images

You just dealt with your clutter and your house is much neater. Congratulations should be in order, but instead of taking your former treasures or trash to Goodwill or the landfill, you rented a storage unit. You're spending $20-$300 a month for items you don't use or need.

You've joined the nearly 1 in 10 Americans who are contributing to the profits of the multibillion-dollar self-storage industry. Instead of renting space to store your old electronics, furniture and holiday paraphernalia, you could be funding your future retirement.

The retirement picture in America isn't a rosy one. According to the most recent retirement confidence survey by the Employee Benefit Research Institute, retirement savings are low and only a minority of workers are adequately preparing for it. 70% of those surveyed admitted they could save an additional $25 a week.

And a recent Bankrate survey found that 10% of workers aren't saving anything at all for retirement, while another 14% are saving less than they were a year ago.

What are we saving in storage units? Top 10 items include furniture, electronics, appliances, documents and files, collectables or antiques, vehicles, seasonal items, photographs, and books, DVDs and other media, according to Simply Self Storage with 187 locations nationwide.

Why rent a storage unit for that stuff?

There are some good reasons to rent space. "Here in Michigan, people rent storage units to store motorcycles and cars during the winter," says CFP professional Robert Schmansky of Clear Financial Advisors in Livonia, Michigan.

Another good reason: You're in transition and have too much stuff to fit in that temporary small apartment pending your move to a larger, permanent home, Schmansky says.

Or, you may not be emotionally ready to deal with furniture and other items inherited from your parents, says professional organizer Liz Taylor, marketing director of the National Organization of Professional Organizers in North Carolina.

Taylor gives her clients a year. "If you're going to be using the storage unit longer than a year, get rid of it," she says. "After a year, people should be able to deal emotionally with whatever is in there."

For some people, it seems easier to pay that money every month than come to terms with the emotions linked to those things, Taylor says.

Rent storage unit vs. save for retirement*

"It's a lot of delayed decision making," Taylor says. "It's not just the things -- it's the feelings behind the things. People think, 'I don't want to deal with it, so I'll stick it over there and pay $100 a month. That's all I can do.'"

Unrealistic expectations

People also may have a distorted view of how much those collectables are worth or will ever be worth, Schmansky says. "We've all heard the stories: 'I wish I'd held on to that baseball card collection,'" he says. "So many things people collect these days they believe will have some kind of value."

Schmansky knows someone who collects Longaberger baskets and thinks that collection is valuable. After checking the price guides, not so much. "It's nowhere near what her perceived value of them is," he says.

Says Taylor: "I tell my clients: 'If you keep everything, then nothing has value.'"

When you look at the tradeoffs, those baskets, old furniture and photos aren't worth so much after all.

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