Proceeds from RE sale go where for retirement?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
zz4
Posts: 83
Joined: Wed Dec 06, 2017 11:29 am

Proceeds from RE sale go where for retirement?

Post by zz4 » Sun Dec 31, 2017 10:57 am

Lets say I sell my VHCOL home when I retire for $800k and move to sunny Florida. I purchase a retirement house for $400k. Where is the best place to put the leftover money with safety/tax efficiency in mind as I'll be completely retired?

User avatar
Sandtrap
Posts: 5454
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Proceeds from RE sale go where for retirement?

Post by Sandtrap » Sun Dec 31, 2017 11:18 am

zz4 wrote:
Sun Dec 31, 2017 10:57 am
Lets say I sell my VHCOL home when I retire for $800k and move to sunny Florida. I purchase a retirement house for $400k. Where is the best place to put the leftover money with safety/tax efficiency in mind as I'll be completely retired?
X dollars paying off debt.
X dollars in your Emergency Fund (high yield accounts, short term cd's) (safety of principal)
X dollars in your portfolio non taxable space.
then X dollars in your portfolio taxable space.

Here you go
Funding Priority (what do I do first?)
https://www.bogleheads.org/wiki/Priori ... vestments
Tax Efficient Fund Placement
https://www.bogleheads.org/wiki/Tax-ef ... _placement

mahalo,
j :D

22twain
Posts: 1598
Joined: Thu May 10, 2012 5:42 pm

Re: Proceeds from RE sale go where for retirement?

Post by 22twain » Sun Dec 31, 2017 12:23 pm

Have you previously decided on an overall allocation plan for your investable assets (usually referred to on this forum for short as "AA" = "asset allocation")? The standard "minimal" decisions we make here are (1) % of stocks versus fixed income in general (2) within your stocks, % of domestic versus international. If you haven't decided that yet, do it first.

Then, invest the new money so it fits with your target AA while minimizing potential taxes, as per the second link that Sandtrap gave you. Unless I had some reason to do otherwise, I would use the standard Vanguard funds of the "three-fund portfolio", and possibly adjust the allocation in my tax-deferred account (in my case, a 403b) at the same time to optimize tax efficiency.
My investing princiPLEs do not include absolutely preserving princiPAL.

zz4
Posts: 83
Joined: Wed Dec 06, 2017 11:29 am

Re: Proceeds from RE sale go where for retirement?

Post by zz4 » Sun Dec 31, 2017 1:51 pm

22twain wrote:
Sun Dec 31, 2017 12:23 pm
Have you previously decided on an overall allocation plan for your investable assets (usually referred to on this forum for short as "AA" = "asset allocation")? The standard "minimal" decisions we make here are (1) % of stocks versus fixed income in general (2) within your stocks, % of domestic versus international. If you haven't decided that yet, do it first.

Then, invest the new money so it fits with your target AA while minimizing potential taxes, as per the second link that Sandtrap gave you. Unless I had some reason to do otherwise, I would use the standard Vanguard funds of the "three-fund portfolio", and possibly adjust the allocation in my tax-deferred account (in my case, a 403b) at the same time to optimize tax efficiency.
Yes, that's was what I was thinking. My AA is already set with my retirement investments (3 fund system), however I was looking for suggestions on where to put the money. I guess taxable only. New IRA contributions would only hold 12k max.

delamer
Posts: 6387
Joined: Tue Feb 08, 2011 6:13 pm

Re: Proceeds from RE sale go where for retirement?

Post by delamer » Sun Dec 31, 2017 2:29 pm

zz4 wrote:
Sun Dec 31, 2017 1:51 pm
22twain wrote:
Sun Dec 31, 2017 12:23 pm
Have you previously decided on an overall allocation plan for your investable assets (usually referred to on this forum for short as "AA" = "asset allocation")? The standard "minimal" decisions we make here are (1) % of stocks versus fixed income in general (2) within your stocks, % of domestic versus international. If you haven't decided that yet, do it first.

Then, invest the new money so it fits with your target AA while minimizing potential taxes, as per the second link that Sandtrap gave you. Unless I had some reason to do otherwise, I would use the standard Vanguard funds of the "three-fund portfolio", and possibly adjust the allocation in my tax-deferred account (in my case, a 403b) at the same time to optimize tax efficiency.
Yes, that's was what I was thinking. My AA is already set with my retirement investments (3 fund system), however I was looking for suggestions on where to put the money. I guess taxable only. New IRA contributions would only hold 12k max.
And you can’t contribute to an IRA unless you have earned income during the year in any case.

kerplunk
Posts: 780
Joined: Sun Apr 17, 2011 9:58 pm

Re: Proceeds from RE sale go where for retirement?

Post by kerplunk » Sun Dec 31, 2017 2:32 pm

Agreed with the folks above. Funding priority wiki.

Advice regarding real estate in Florida: don’t choose a property in a flood zone and make sure the structure does not have a flat roof.

RetiredCSProf
Posts: 179
Joined: Tue Feb 28, 2017 4:59 pm

Re: Proceeds from RE sale go where for retirement?

Post by RetiredCSProf » Sun Dec 31, 2017 4:04 pm

Consider a LTC insurance policy with a 3% inflation rider, with balance going to life insurance if not used.

zz4
Posts: 83
Joined: Wed Dec 06, 2017 11:29 am

Re: Proceeds from RE sale go where for retirement?

Post by zz4 » Mon Jan 01, 2018 11:08 am

Thanks for the input. It looks like I can only place the money in a taxable account. 50/50 AA taxable, as all the other areas are unavailable. LTC insurance will be investigated for sure.

22twain
Posts: 1598
Joined: Thu May 10, 2012 5:42 pm

Re: Proceeds from RE sale go where for retirement?

Post by 22twain » Mon Jan 01, 2018 12:29 pm

zz4 wrote:
Sun Dec 31, 2017 1:51 pm
New IRA contributions would only hold 12k max.
So one of you is over 50 ($6500) and the other is under 50 ($5500)? Just checking to make you're not thinking 2 x $6000...
My investing princiPLEs do not include absolutely preserving princiPAL.

User avatar
FrugalInvestor
Posts: 4927
Joined: Fri Nov 07, 2008 12:20 am

Re: Proceeds from RE sale go where for retirement?

Post by FrugalInvestor » Mon Jan 01, 2018 12:37 pm

zz4 wrote:
Mon Jan 01, 2018 11:08 am
LTC insurance will be investigated for sure.
Investigate it thoroughly by searching here for previous discussions. It's a difficult subject and highly dependent upon your personal/family/financial situation as well as your best guess of the future of the product.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

Copernicus
Posts: 323
Joined: Thu May 16, 2013 4:38 pm

Re: Proceeds from RE sale go where for retirement?

Post by Copernicus » Mon Jan 01, 2018 12:47 pm

delamer wrote:
Sun Dec 31, 2017 2:29 pm
zz4 wrote:
Sun Dec 31, 2017 1:51 pm
22twain wrote:
Sun Dec 31, 2017 12:23 pm
Have you previously decided on an overall allocation plan for your investable assets (usually referred to on this forum for short as "AA" = "asset allocation")? The standard "minimal" decisions we make here are (1) % of stocks versus fixed income in general (2) within your stocks, % of domestic versus international. If you haven't decided that yet, do it first.

Then, invest the new money so it fits with your target AA while minimizing potential taxes, as per the second link that Sandtrap gave you. Unless I had some reason to do otherwise, I would use the standard Vanguard funds of the "three-fund portfolio", and possibly adjust the allocation in my tax-deferred account (in my case, a 403b) at the same time to optimize tax efficiency.
Yes, that's was what I was thinking. My AA is already set with my retirement investments (3 fund system), however I was looking for suggestions on where to put the money. I guess taxable only. New IRA contributions would only hold 12k max.
And you can’t contribute to an IRA unless you have earned income during the year in any case.
I presume, the income must be earned through employment or business? Investment dividends income is not counted as income for IRA contribution eligibility?

User avatar
FrugalInvestor
Posts: 4927
Joined: Fri Nov 07, 2008 12:20 am

Re: Proceeds from RE sale go where for retirement?

Post by FrugalInvestor » Mon Jan 01, 2018 12:53 pm

Copernicus wrote:
Mon Jan 01, 2018 12:47 pm
delamer wrote:
Sun Dec 31, 2017 2:29 pm
zz4 wrote:
Sun Dec 31, 2017 1:51 pm
22twain wrote:
Sun Dec 31, 2017 12:23 pm
Have you previously decided on an overall allocation plan for your investable assets (usually referred to on this forum for short as "AA" = "asset allocation")? The standard "minimal" decisions we make here are (1) % of stocks versus fixed income in general (2) within your stocks, % of domestic versus international. If you haven't decided that yet, do it first.

Then, invest the new money so it fits with your target AA while minimizing potential taxes, as per the second link that Sandtrap gave you. Unless I had some reason to do otherwise, I would use the standard Vanguard funds of the "three-fund portfolio", and possibly adjust the allocation in my tax-deferred account (in my case, a 403b) at the same time to optimize tax efficiency.
Yes, that's was what I was thinking. My AA is already set with my retirement investments (3 fund system), however I was looking for suggestions on where to put the money. I guess taxable only. New IRA contributions would only hold 12k max.
And you can’t contribute to an IRA unless you have earned income during the year in any case.
I presume, the income must be earned through employment or business? Investment dividends income is not counted as income for IRA contribution eligibility?
Correct. Dividends by definition are not 'earned.'

https://www.irs.gov/credits-deductions/ ... ned-income
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

Post Reply