Ways to downsize during retirement

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In a nation obsessed with everything “biggie-sized,” the thought of downsizing holds as much appeal as a root canal.

We just love big things. Texans boast about the size of their state, but Alaska has bigger bragging rights, at more than twice the size of the Lone Star state. Even our national monuments speak volumes about our size-consciousness. Think Mount Rushmore: The colossal sculptures of the four presidential busts are 60 feet tall.

So to suggest that we trade in a Cadillac Fleetwood for a Smart car or move from a five-bedroom Victorian into a two-bedroom condo (sans garage) is akin to cultural heresy.

But for many retirees, downsizing isn’t an option — it’s a necessary survival strategy that could stretch your savings to the end zone of retirement. All it takes is one or two unfortunate life events to throw one’s retirement plans into a tailspin.

Consider these tips to trim the fat from your budget and boost your bottom line.

Scale back without feeling deprived
Donate and deduct
When having a garage sale is not in the cards, donating to charity can be an excellent way to get rid of excess things in your home, help others in need and get a tax write-off.

If you downsize into a smaller home, chances are you’ll have to get rid of a lot of stuff. Donating extra tools and furniture to charity can get you a decent tax deduction, but always make sure to get an itemized receipt.

“I would get written documentation and take photographs to back up that it’s in good condition,” says Certified Financial Planner Connie Stone.

Such documentation can be important if the IRS has questions at a later date. IRS rules for donations have become stricter in recent years.

In addition, retirees typically don’t need as much clothing as people in their working years and they tend to dress more casually.

Stone says donating suits and dresses can net “hundreds, even thousands of dollars” as a tax write-off as long as the clothes are in good condition.

The IRS limits you to a deduction of between 30 percent and 50 percent of your adjusted gross income, depending on the type of property donated. The receiving organization must also be a charity under code section 501(c)(3) for your donations to qualify as a tax deduction.