Hi All,
I'd would appreciate hearing your opinions on what I should do.
Married with no kids. Me-50, Wife-52
House - Paid.
Cars - Paid.
Lifestyle - Simple, nothing fancy.
Investment property 1 - Paid; Rent income: 1,700/month
Investment property 2 - Mortgage - 265K; Rent income: 2,250/month
Money market and CDs - 370K
Taxable portfolio - 400K (conservative index funds and conservative individual stocks) All equity.
Tax deferred - 1.5 million (70% index funds, 20% managed funds, and 10% individual stocks) All equity.
Roth - .5 million (100% Agressive managed funds) All equity.
My plan is to retire at the end of next year with the option of either working part time or not working at all. Wife still wants to work part-time grossing approximately 40K/year. We will spend down our Cash and Taxable accounts until I reach 60 - so about 8 years.
After funding our sep-ira (40K/year) and taxes, our take home income will be about 130K/year. I'm thinking of using this money to pay off investment property 2 rather than putting it in cash/CD earning around 1%. My reasoning is not only it's at a higher rate, it will also give a peace of mind knowing the market will not have an impact, and it'll be nice to not carrying this debt into ER.
The net combined rent income should almost cover our basic monthly expenses.
My question: Am I doing the right thing, given that I want to stay in a lower tax bracket in the future? Is it better to put this 260K somewhere else? I am not sure other than money market and CD's since bonds don't sound like it's a good alternative right now.
Thank you!
I'd would appreciate hearing your opinions on what I should do.
Married with no kids. Me-50, Wife-52
House - Paid.
Cars - Paid.
Lifestyle - Simple, nothing fancy.
Investment property 1 - Paid; Rent income: 1,700/month
Investment property 2 - Mortgage - 265K; Rent income: 2,250/month
Money market and CDs - 370K
Taxable portfolio - 400K (conservative index funds and conservative individual stocks) All equity.
Tax deferred - 1.5 million (70% index funds, 20% managed funds, and 10% individual stocks) All equity.
Roth - .5 million (100% Agressive managed funds) All equity.
My plan is to retire at the end of next year with the option of either working part time or not working at all. Wife still wants to work part-time grossing approximately 40K/year. We will spend down our Cash and Taxable accounts until I reach 60 - so about 8 years.
After funding our sep-ira (40K/year) and taxes, our take home income will be about 130K/year. I'm thinking of using this money to pay off investment property 2 rather than putting it in cash/CD earning around 1%. My reasoning is not only it's at a higher rate, it will also give a peace of mind knowing the market will not have an impact, and it'll be nice to not carrying this debt into ER.
The net combined rent income should almost cover our basic monthly expenses.
My question: Am I doing the right thing, given that I want to stay in a lower tax bracket in the future? Is it better to put this 260K somewhere else? I am not sure other than money market and CD's since bonds don't sound like it's a good alternative right now.
Thank you!