prototype
Recycles dryer sheets
I am currently planning on selling my house this summer and expect to net ~$380K. Based on my (and fiancée’s current plan (marriage date TBD based on when it makes sense to do so) we will not be buying another home for 3 to 5 years (renting).
Ignoring all the tax ramifications of not buying a new home in 24 months (I am pretty sure I haven’t used any home sale cap gains credits, since I gave my half of first home to Ex in 1997 -- I’ll probably see a tax advisor on the whole tax thing), I was wondering if anyone on this board has gone through a similar situation and specifically what type basic AA they used for their “net proceeds” that they knew they would holding for more than 2 years, and probably closer to 4 years.
a) I am guessing about 150-200K (half the cost of new home) will go toward new home cash purchase in ~4 years)
b) probably need to by a new car/truck in the next year and dump my two 15 year old beaters (~35K)
c) The rest (~$150K) I was just planning to allocate across my current Vanguard after tax accounts which are currently ~60/40.
So the real struggle I am having is what to do with the $200K I’ll need in about 4 years for buying, moving, new stuff. I have time to figure this out, sale sign is going up in early to mid June 2014.
I don’t want to take too much risk, actually I would be happy just stay even with true inflation(1 or 2 points above CPI? JMHO) on the ~$200K Bucket “a” (1 or 2 points above CPI? JMHO on inflation) after taxes on interest, qualified and non qualified dividends, ST/LT cap gains…
My current Candidate/Base Options rolling around in my head for what I will call the $200K bucket (a).
1) Low risk -- CDs, Treasuries/Treasury funds, Short Term Bond Funds,MM….. (low risk, and real low return it seems as of the last couple of years anyway). Actually looks like the money has a high chance of “decaying” in value. But minimal risk if a “crash” hits.
2. Med risk – spread/diversify it out in various mutual funds, maybe go with something closer to a 50/50 basic AA. A bit roll of the dice approach.
Anyway, I know, there are a lot of approaches based on tax ramifications and risk I am willing to take. I was hoping to get some ideas or suggestions from people who may have been through this before (or something similar), so I can be halfway halfway knowledgeable before I begin more formal research and possibly/probably discuss with professional tax/ICFA type.
Thank You in advance for any input
Ignoring all the tax ramifications of not buying a new home in 24 months (I am pretty sure I haven’t used any home sale cap gains credits, since I gave my half of first home to Ex in 1997 -- I’ll probably see a tax advisor on the whole tax thing), I was wondering if anyone on this board has gone through a similar situation and specifically what type basic AA they used for their “net proceeds” that they knew they would holding for more than 2 years, and probably closer to 4 years.
a) I am guessing about 150-200K (half the cost of new home) will go toward new home cash purchase in ~4 years)
b) probably need to by a new car/truck in the next year and dump my two 15 year old beaters (~35K)
c) The rest (~$150K) I was just planning to allocate across my current Vanguard after tax accounts which are currently ~60/40.
So the real struggle I am having is what to do with the $200K I’ll need in about 4 years for buying, moving, new stuff. I have time to figure this out, sale sign is going up in early to mid June 2014.
I don’t want to take too much risk, actually I would be happy just stay even with true inflation(1 or 2 points above CPI? JMHO) on the ~$200K Bucket “a” (1 or 2 points above CPI? JMHO on inflation) after taxes on interest, qualified and non qualified dividends, ST/LT cap gains…
My current Candidate/Base Options rolling around in my head for what I will call the $200K bucket (a).
1) Low risk -- CDs, Treasuries/Treasury funds, Short Term Bond Funds,MM….. (low risk, and real low return it seems as of the last couple of years anyway). Actually looks like the money has a high chance of “decaying” in value. But minimal risk if a “crash” hits.
2. Med risk – spread/diversify it out in various mutual funds, maybe go with something closer to a 50/50 basic AA. A bit roll of the dice approach.
Anyway, I know, there are a lot of approaches based on tax ramifications and risk I am willing to take. I was hoping to get some ideas or suggestions from people who may have been through this before (or something similar), so I can be halfway halfway knowledgeable before I begin more formal research and possibly/probably discuss with professional tax/ICFA type.
Thank You in advance for any input