Cash to invest ?

[Monterey298sc]

Sold my business property s for 2M now sitting in cash money market at VG. I owe approximately 250K in taxes .
So leaves me about 1.75 to invest for retirement. We have IRA with value of 1.8 M

Our rental property value about 150,000
Lake home value about 350,000
Primary home value 450,000

I am 62 and wife 60
Plus SS planning on 67 drawing

All paid off with no mortgages.


Thinking CD , but waiting until first of year for higher rate
Annuity , treasury bond ,

Oh yea just wife and I retired 30 days ago.

Looking for ideas

 

[MarieIG]

What about treasuries that ripen in early 23?

 

[SnowballCamper]

What asset allocation do you want to follow? How many years of cash do you want to keep on hand?

 

[disneysteve]

sitting in cash money market at VG.

Thinking CD , but waiting until first of year for higher rate
Annuity , treasury bond

Why wait? The VG settlement fund is paying 2.1% I think but even a 3-month treasury is paying around 2.8% and 6-month bills are over 3%. If you are betting that rates will rise over the next few months, you can still beat the settlement fund rate in the meantime.

 

[Kork13]

Just for a contrary option -- I'm a bit of a RE bug, soooooo.... What do you think of buying up a clutch of 5ish additional rental properties? Aim for around $200k/door, then you can be more conservative with the remaining $1M (btw, I'd take disneysteve's advice -- short-term bonds until you know better what else you want to do with it).

Meantime, the rental properties can serve as another stream of income throughout retirement, likely covering a solid chunk of your needs. If you don't want to handle them yourself, you can always hire a prop manager, who would be happy to take on a half-dozen doors.

 

[Monterey298sc]

What asset allocation do you want to follow? How many years of cash do you want to keep on hand?

60/40
Want 2 years cash

 

[calmloki]

Just for a contrary option -- I'm a bit of a RE bug, soooooo.... What do you think of buying up a clutch of 5ish additional rental properties? Aim for around $200k/door, then you can be more conservative with the remaining $1M (btw, I'd take disneysteve's advice -- short-term bonds until you know better what else you want to do with it).

Meantime, the rental properties can serve as another stream of income throughout retirement, likely covering a solid chunk of your needs. If you don't want to handle them yourself, you can always hire a prop manager, who would be happy to take on a half-dozen doors.

We used rental property - and about 35-40 years - to get where we are today. We've been divesting and are now down to 19 apartment units. Have been backing out of most of the direct involvement with the tenants, but RE continues to be a large part of our annual income and net worth. Feel that we can influence our income and investment worth vs stocks shooting up or falling down according to the whims and humours of the moneyed world. At the age of 72 I gotta say RE is not really full on retirement though. There are certain stresses..

Maybe consider some savings accounts - we are making anywhere from 1.75% to 2.8% with instant access to the cash if we feel like making a 12% RE loan for instance. Much to be said for making some while keeping options open even if one isn't making the absolute maximum.

 

[SnowballCamper]

Assuming your IRA is already allocated 60/40, then set aside the two years cash, maybe the next year in a CD if you find a good one year rate.

Then put 60% of what's left in VTI. It's probably worth making a bond ladder (as opposed to buying a bond fund). pb4uski describes the bond ladder in many of his posts (basically, you buy varying maturity so that they convert to the 2yr cash fund as the years go on).

You should probably consider Roth conversions to offset the large tax bill coming with RMDs at about 72yo (after the tax year for the business sale).
Dumping a large sum into VTI can be an emotional experience, so maybe dollar cost average into it over a few months with limit orders.

This is all just what a vanilla index investor would likely do...