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Where to Put Money for Future Home Purchase
Old 01-15-2013, 02:17 PM   #1
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Where to Put Money for Future Home Purchase

One of my family's major financial goals is to save enough money in taxable accounts so that we can purchase a house with cash when I retire from the military (anywhere from 5-7 years depending on assignments). I currently have the majority of our "house fund" money in Vanguard's Wellesley Admiral Fund (VWIAX). I realize that many would likely advise against using this for a taxable account because it throws off a fair amount of taxes each year, but my goal is to strike a reasonable balance between growth and risk...I want to see the money grow, but I don't want to have huge swings with such a short time horizon before I expect to use the money. So, my questions is, if you were in my shoes where would you park the money given the information above?
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Old 01-15-2013, 02:54 PM   #2
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CDs.
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Old 01-15-2013, 03:44 PM   #3
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Originally Posted by brewer12345 View Post
CDs.
+1
This is money you need to be SAFE.
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Old 01-15-2013, 03:46 PM   #4
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pen fed three yr cd is 1.85 apr
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Old 01-15-2013, 07:30 PM   #5
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I think it depends on how much risk you are willing to take. If you want to take no risk then FDIC insured CDs or online savings is a good way to go. While Wellesley is relatively low risk it does carry some equity risk and some interest rate risk. While i think it is a fine choice for 5-7 year money, I am a bit of a risk taker.
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Old 01-15-2013, 10:07 PM   #6
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If you are willing to be flexible in your timing, something like Wellesley should be fine. You just may have to wait a year or two for things to recover if it takes a dip just before you retire. I'd be wary of bonds in that time frame due to what seems like a certainty (one of these years) of rising rates. So I'll +1 the CD recommendation if Wellesley seems too risky.
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Old 01-17-2013, 02:30 PM   #7
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I am flexible in my timeline so willing to take a little more risk. Appreciate all of the advice!
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