Hi everyone,
Long time reader of this forum who greatly appreciates all of the information and advice shared. Kids are soon to all be in college and we are thinking more about our next phase.
DW and I are in our early 50s and both work for big corp. We are potentially ~ 5+ years out and are considering a significant real estate purchase in our future landing spot. We would like to keep both properties for likely the next 10+ years.
Our NW (excl existing home & 529s) is ~$6.25M. The potential (no mortgage) RE purchase would exhaust most current available non-retirement after tax savings/assets, leaving ~$4.5M of mostly 401ks/IRAs. New property is located in a prime vaca area and would be used as a ST rental in the near term, conservatively covering its expenses.
I’ve run #s through firecalc with assets excl the RE purchase post (~4.5m) retiring in 5 yrs (assuming continued employment) and we seem to get to desired +$200k/yr spending (incl health care spending). We generally live below our means and increase savings each year.
What is concerning is losing all of our (post tax) equity index funds/Indic stocks. Also, Is this much RE exposure just too crazy? The potential RE purchase market has held/increased value in the long run, but is definitively not immune to ups/down periods historically.
It feels a bit of a stretch, but will we get a better opportunity down the line? We would keep emergency funds in cash and have some remaining post tax equities to sell, if necessary. Future savings in our remaining working years would be tilted toward after-tax investing. Besides using in our retirement years, the thinking is the RE would remain in the family for the future generation.
Recognize this is a first world problem, but appreciate any comments/thoughts folks have.
Thank you!
AT
Long time reader of this forum who greatly appreciates all of the information and advice shared. Kids are soon to all be in college and we are thinking more about our next phase.
DW and I are in our early 50s and both work for big corp. We are potentially ~ 5+ years out and are considering a significant real estate purchase in our future landing spot. We would like to keep both properties for likely the next 10+ years.
Our NW (excl existing home & 529s) is ~$6.25M. The potential (no mortgage) RE purchase would exhaust most current available non-retirement after tax savings/assets, leaving ~$4.5M of mostly 401ks/IRAs. New property is located in a prime vaca area and would be used as a ST rental in the near term, conservatively covering its expenses.
I’ve run #s through firecalc with assets excl the RE purchase post (~4.5m) retiring in 5 yrs (assuming continued employment) and we seem to get to desired +$200k/yr spending (incl health care spending). We generally live below our means and increase savings each year.
What is concerning is losing all of our (post tax) equity index funds/Indic stocks. Also, Is this much RE exposure just too crazy? The potential RE purchase market has held/increased value in the long run, but is definitively not immune to ups/down periods historically.
It feels a bit of a stretch, but will we get a better opportunity down the line? We would keep emergency funds in cash and have some remaining post tax equities to sell, if necessary. Future savings in our remaining working years would be tilted toward after-tax investing. Besides using in our retirement years, the thinking is the RE would remain in the family for the future generation.
Recognize this is a first world problem, but appreciate any comments/thoughts folks have.
Thank you!
AT