What to do with Capital Gain

[jaybones]

I will be retiring from the Federal government on January 1, 2010. Wooo Whoooo!

The plan is to sell our house inside the Beltway. We expect to net over $300,000, after we pay off what's left of our mortgage and a line of credit. After we sell the house we plan to move to Charlottesville, VA. We plan to rent to make sure this is where we want to settle for the rest of our lives, and to find the exactly the best part of town to buy.

My question is, "What should we do with the $300,000 until we find our dream house?" We want to be able to access it, as soon as we find the right house, we can't afford to lose too much of this, if the market takes another nosedive, and we would like to get the maximum positive return while we are looking. I know this means I want everything, but why not, I'll be retired?

If this topic has been discussed before, I apologize for the repetition and would appreciate a link to the previous postings.

[Moemg]

When we moved from New Jersey to Florida we put the money in CD's while we rented . Of course Cd's were paying a little better at the time .

[crazy connie]

Yahoo has an article today on intrest bearing checking accounts paying around 4%. I would look at 3 or 4 of those were it me. Keep it under 100K for FDIC Insurance purposes.

[yakers]

If you are under CSRS and still working you can make a contribution to the OPM Voluntary Contribution program. I never had much in it but it provides 10% safe bond rates of return.

[jaybones]

Yakers,
I am CSRS, but there are a couple problems with your idea. 1) When I quit the Feds to go back to grad school, I withdrew my CSRS contributions, and I have non-CSRS covered Federal time, so I'd have to repay that first, to the tune of $4,000. 2) I won't have the money until I sell the house and I plan on doing some work on the house after I retire and before I put the house on the market. 3) The Voluntary Contributions program does not pay anywhere near what it used to. But thanks for the idea. It wasn't something I had thought of and I did check it out yesterday after reading your post.

[yakers]

Darn, didn't catch it fast enough, it was 100% safe not a 10% return. Anyway hope you find a good place for your money. If I sold my house and had to park money somewhere I would probably look at VG money market funds and maybe Penfed CDs, some are short term and longer ones with a reasonable fee for early redemption.