Please go back and re-read, if you are interested. I bought the undeveloped land 25 years ago, purely as an investment. In today's dollars, paid peanuts for it. It has never been on the retirement/portfolio radar at all. Having second thoughts now about selling it, or building on it as a next step home. There is ZERO stress or anxiety here.
I have been into antique cars for 30+ years and have never lost a dime on any of them, making $$ on anything that I have re-sold. And, I would challenge anyone to a contest of "who is having more fun" in retirement. This whole post was about asking for opinions on options that we have, to use a small fraction of retirement portfolio to get us past replacing a couple cars and bridging a period when we are real estate heavy.
But let me get back to the collective brain trust here, and ask this:
If you needed a cash source for a 2 year window, and could tap DWs pension lump sum (which represents about 3% of the portfolio) at a 22% tax rate (because she is still working) OR, tap her Roth which is about enough to source the funds needed tax free, but forego the future growth on it (also tax free), what would you do?? Eat the taxes and leave the Roth alone, or take the Roth funds?
I would not touch the ROTH, as it sounds like it's the only ROTH you folks have, and you are young enough that it will grow tax free for many decades. I wonder if you would be so quick to spend the ROTH if it was your ROTH ?
We each have a Roth. She's beyond 59.5, I'm not. That is why hers is a viable option.
My opinion is that a second home is really a splurge, and it requires a lot of ongoing investment to keep a second home going: repairs, utilities, taxes, insurance. It gives me a headache. Do you spend a lot of time there? I would sell it unless you do. Carrying the second home is where a lot of your budget is probably going. The land can sit there without work and it sounds like you may want to build on it? And the taxes are certainly minimal. Keep in mind there will be capital gains taxes due on the sale of either property.
Actually you can take out the contributions you made to your Roth tax free anytime.
https://finance.zacks.com/can-withdraw-ira-penalties-6393.html
" You can withdraw Roth IRA contributions at any time without penalty."
Opposite for me. I bought a 2004 TT with about 34k miles when it was 6 years old, paid less than a Baha I was looking at with over 70k miles and it ran great. I sold it a year ago.+2. I actually typed the exact comment about paying off at least one property and un-leveraging yourself, but forgot to press Post.
The reason I'm typing a new comment is to caution you against buying an Audi unless you want to spend a LOT of time or money keeping it running. I got to know my Audi guys way too well during my tenure driving my A4. Granted I put a ton of miles on it, but a lot of stuff that shouldn't have broken repeatedly did. Never again. I drive a boring Hyundai Sonata Hybrid now and my maintenance is a tiny fraction of what it was with the Audi.
Fast forward to age 72. In my case, RMDs are looming and 22% will happen and probably more. In addition, IRMA premiums (taxes on higher income folks on Medicare) will get another big chunk.
If you pull what you want out of your tax deferred accounts now you won't get nailed for IRMA on those withdrawals later.
... She got her pension check today and it is now parked in the home bank as an IRA so it is there if we need it. ......
I think we are going to get a HELOC to. It will cost us only $50 a year and we have to keep it open for 3 years I think. Will just be another source for ready cash until we sell a property.
Doesn't #1 still place you in the position of being currently strapped for free cash? You may need to pay penalty plus taxes to withdraw it, (realizing that age 59-1/2 which negates the penalty is nearly or already here).
But if it came from a tax deferred account AND it was a large check - none of my business, just thinking through typing - it could/would be worthwhile to do what you did and pay taxes only on what you need to withdraw in the future rather than the full initial amount.
Look for a 0% interest rate on a new car. Only buy one. DW and I have gotten by on one for 15 years, and we live rural. No uber.
Sorry, I will never buy a brand new car.