I was just wondering what you thought of this. I currently rent, but will purchase a primary residence in the next three to six years. I have taken a look at the values in my taxable investment accounts around February of 2009 (an investment portfolio low point for me) and compared them with the value today. There exists a significant increase in value.
Do it make sense for me to sell off these taxable investment accounts so that I could put the gains into something more safe- say the Vanguard Short Term Bond Fund? Then, when I make the real estate purchase in the next three to six years, I will be able to pay for most of the property, if not all of it, in cash? I figure everybody needs somewhere to live, and you are either paying rent or paying off a mortgage. If I can purchase a residence with cash, then my retirement budget will be reduced significantly because a major expense (housing) will already be paid for.
Someone who knows more about investing than me suggested that I stay away from my tax deferred/tax exempt (401k, Roth IRA, etc) accounts and focus on the taxable accounts if I am going to take this course of action.
I am thinking that housing prices will not rise significantly in three to six years, but I am not sure that the gains I see today in my taxable accounts will necessarily still be there three to six years from now. That is why I thought it might be a good idea to lock into those gains now.
I know that if I do sell off these taxable investment accounts, my asset allocation will completely change, and I will need to make necessary adjustments moving forward to get it back on track. Also, does it make any difference from a tax perspective, if I sold all of these taxable investment accounts in one year or if I spread it out over two or more years?
Thus far, I have only added to these taxable investment accounts, so the idea of selling them is somewhat unusual to me.
Thank you for your advice.
Do it make sense for me to sell off these taxable investment accounts so that I could put the gains into something more safe- say the Vanguard Short Term Bond Fund? Then, when I make the real estate purchase in the next three to six years, I will be able to pay for most of the property, if not all of it, in cash? I figure everybody needs somewhere to live, and you are either paying rent or paying off a mortgage. If I can purchase a residence with cash, then my retirement budget will be reduced significantly because a major expense (housing) will already be paid for.
Someone who knows more about investing than me suggested that I stay away from my tax deferred/tax exempt (401k, Roth IRA, etc) accounts and focus on the taxable accounts if I am going to take this course of action.
I am thinking that housing prices will not rise significantly in three to six years, but I am not sure that the gains I see today in my taxable accounts will necessarily still be there three to six years from now. That is why I thought it might be a good idea to lock into those gains now.
I know that if I do sell off these taxable investment accounts, my asset allocation will completely change, and I will need to make necessary adjustments moving forward to get it back on track. Also, does it make any difference from a tax perspective, if I sold all of these taxable investment accounts in one year or if I spread it out over two or more years?
Thus far, I have only added to these taxable investment accounts, so the idea of selling them is somewhat unusual to me.
Thank you for your advice.