62 with a 12 and 14 year old....$5million plus rental income

[FI_by_2023]

I am owner of apartments as well and have similar debate....my worry is more on unknown liability (fire, flood, Covid, etc) putting a dent in cash flow. Cashing out would reduce risks, but cash flow reduction and diversification would be missed. Highly recommend a management company, which is my approach. They can earn their keep in increasing rents and being firmer on tenants. That might be stepping stone for you to determine whether to keep or sell.

If you do sell, evaluate return alternative based on net proceeds after tax (capital gains, depreciation recapture and ordinary income tax on personal property). You can reduce, or postpone, tax impact, remove mgmt headaches and keep cash flow by investing in a reputable DST. I don’t care for their structure as they don’t generally pay down principal or mortgage....there are some that are 100% equity.

Wish you luck. Keep us posted on the direction you go.

 

[wcs6071]

Thank you for that. My wife is a stay at home Mom (11 years younger) with no income.
I didn't realize my kids would get a SS check after they turn 18. I was under the impression the dependent benefit stopped at 18.

 

[wcs6071]

Not a fishing trawler.....a cruising trawler.

 

[wcs6071]

Good advise. My wife is a stay at home Mom and we both keep a tight rein

 

[wcs6071]

Thanks Ychuck46

 

[wcs6071]

Thanks Imnontrad
Curious on 529. With out of state tuition to state colleges running $45,000+ per year how do you figure I'm overfunding the 529?
Thank you

 

[ivinsfan]

Thank you for that. My wife is a stay at home Mom (11 years younger) with no income.
I didn't realize my kids would get a SS check after they turn 18. I was under the impression the dependent benefit stopped at 18.

It 18 or a still in grade school not college

 

[Walt34]

It 18 or a still in grade school not college

So is this an incentive to tell your kids to flunk a couple of years in elementary/middle school?

 

[wcs6071]

Walt34............Never thought of that ; )

 

[rodi]

It 18 or a still in grade school not college

Slightly more nuanced than that... Age 18, or the June following the 18th birthday IF still enrolled in high school. So if your kid's birthday puts them graduating at age 17, or if they drop out, do the GED, or some other way of ending school prior to 18, the payments stop at 18. If, like my kids who have December birthdays, they turn 18 during their senior year, the payments continue till graduation. If they are not in school, no extra money.

At their 18th birthday, the payments go directly to the child. So you need to have a talk with them if you are counting on that money for the household. It is a decent chunk of money for a kid that might not be mature... We insisted older son pay his portion of car insurance. We're being a little more aggressive with younger son since he gets a bigger payment (since older son aged off SS) He'll be paying towards car insurance and groceries.

Since your wife doesn't have income of her own - she'd also qualify for a benefit as the caretaker of the kids. But her benefit, and the kids' benefits are all under a family cap. You'll need to check the amounts with SS - I never figured out exactly what the basis of the family cap was, nor the individual benefit amounts. The figure is not a straight 1/2 of the total of yours... When my older son aged off - younger son's didn't double - it went up about 30%.

 

[ivinsfan]

Slightly more nuanced than that... Age 18, or the June following the 18th birthday IF still enrolled in high school. So if your kid's birthday puts them graduating at age 17, or if they drop out, do the GED, or some other way of ending school prior to 18, the payments stop at 18. If, like my kids who have December birthdays, they turn 18 during their senior year, the payments continue till graduation. If they are not in school, no extra money.

At their 18th birthday, the payments go directly to the child. So you need to have a talk with them if you are counting on that money for the household. It is a decent chunk of money for a kid that might not be mature... We insisted older son pay his portion of car insurance. We're being a little more aggressive with younger son since he gets a bigger payment (since older son aged off SS) He'll be paying towards car insurance and groceries.

Since your wife doesn't have income of her own - she'd also qualify for a benefit as the caretaker of the kids. But her benefit, and the kids' benefits are all under a family cap. You'll need to check the amounts with SS - I never figured out exactly what the basis of the family cap was, nor the individual benefit amounts. The figure is not a straight 1/2 of the total of yours... When my older son aged off - younger son's didn't double - it went up about 30%.

I remember way back when the payments would/could continue for kids in college...I think that stopped sometime in the 80's.

 

[wcs6071]

Thanks ivinsfan. Good information