2
- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Retirement Property Question
Posted on 11/2/26 at 12:59 pm
Posted on 11/2/26 at 12:59 pm
Looking to retire beginning of next year. Will still have a 100+k income from wife for a year or two. 57 and wanting to purchase Dream home and Keep current home for STR. Area I am in has been profitable. I am worth about 3 non real estate and another Mil in real estate. 2 thirds of the real estate is rentals so current house I live in is worth about 375K. I owe about 140K at 2.45 IR on current house and rentals out right.
Question, I am interested in purchasing my dream home and the guys that manage the majority of my money are trying to steer me away from it. Looking to put 300 down and have not decided on how much i will borrow (have not decided on a house yet). Am I stepping on my on feet here and screwing myself or are my financial guys trying to hang on to their profit?
Question, I am interested in purchasing my dream home and the guys that manage the majority of my money are trying to steer me away from it. Looking to put 300 down and have not decided on how much i will borrow (have not decided on a house yet). Am I stepping on my on feet here and screwing myself or are my financial guys trying to hang on to their profit?
Posted on 11/2/26 at 2:58 pm to djrunner
A lot of people on here will argue that you should never have a house payment when you retire. I disagree because not everyone is living in the location or size of the house they want to retire in. I sold my $385K house in the undesirable city I lived in when I retired, moved to where I wanted to live and bought a $1.2M house. Of course I borrowed money because the alternative would be taking from my IRA and paying the highest tax rate on it.
Let math be your advisor and figure out what is optimal. Create a spreadsheet and look at 40 years of expenses, tax implications, growth, and missed growth opportunities.
Let math be your advisor and figure out what is optimal. Create a spreadsheet and look at 40 years of expenses, tax implications, growth, and missed growth opportunities.
Posted on 11/2/26 at 3:08 pm to Ramblin Wreck
I guess I am most worried about taking 300K out of the market and trying to figure out if it would be better to borrow the majority but with rates close to 7 maybe wait a couple of years...?
Posted on 11/2/26 at 3:26 pm to djrunner
quote:
I guess I am most worried about taking 300K out of the market and trying to figure out if it would be better to borrow the majority but with rates close to 7 maybe wait a couple of years...?
What are the tax implications of taking the $300K? Is it in a retirement account? Worst case would be it is pretax retirement account. If you withdraw it you would pay taxes on it which could be at a rate with your income bracket increased by $300K from a tax standpoint. Also assume you are missing out on future 7% (conservative) annual market growth on the $300K. Or you could pay 7% interest on the loan and deduct the interest from your taxes. For me, my spreadsheet made it an easy answer but your details might be different.
Posted on 11/2/26 at 3:29 pm to Ramblin Wreck
No could clear 300 without digging into retirement accounts. So no penalty, just capital gains.
Posted on 11/2/26 at 3:56 pm to djrunner
Depending on your tax bracket, capital gains taxes are either 15% or 20%
Assume captial gains are $150K and you have to pay 20% -
$150K x 20% = $30K in taxes
Assume you miss out on compounding 7% earnings each year, but let’s keep the math simple and say $24.5K in missed earnings per year.
Year one cost you $30K + $24.5K or $54.5K using those numbers.
On a 30 year, 7% loan - year one interest is only about $24K in comparison. It will decrease every year after that and will immediately be less than the potential $24.5K in earnings.
Those are made up numbers and depend on several factors such as capital gains assumptions and market growth. It also only looks at year one and doesn’t consider compounded growth. On my made up numbers it would be more advantageous to borrow, but the market could also crash next year.
Edit - sorry, I was using $350K not $300K, so $21K in missed earnings, not $24.5K but you get the idea.
Assume captial gains are $150K and you have to pay 20% -
$150K x 20% = $30K in taxes
Assume you miss out on compounding 7% earnings each year, but let’s keep the math simple and say $24.5K in missed earnings per year.
Year one cost you $30K + $24.5K or $54.5K using those numbers.
On a 30 year, 7% loan - year one interest is only about $24K in comparison. It will decrease every year after that and will immediately be less than the potential $24.5K in earnings.
Those are made up numbers and depend on several factors such as capital gains assumptions and market growth. It also only looks at year one and doesn’t consider compounded growth. On my made up numbers it would be more advantageous to borrow, but the market could also crash next year.
Edit - sorry, I was using $350K not $300K, so $21K in missed earnings, not $24.5K but you get the idea.
This post was edited on 11/2/26 at 3:58 pm
Posted on 11/2/26 at 4:48 pm to Ramblin Wreck
quote:
A lot of people on here will argue that you should never have a house payment when you retire. I disagree because not everyone is living in the location or size of the house they want to retire in.
I've got 25 years left @ 2.25% and I'm planning to retire in a few years. No way I'm paying that off early. I just account for the mortgage payment as part of my basic expenses in early retirement.
Posted on 11/2/26 at 4:50 pm to Ramblin Wreck
Consider a SBLOC. When I purchased going into retirement, I borrowed against my taxable portfolio to fund down payment and financed the rest at a low mortgage rate. The rate I negotiated (SOFR +1.55%) was better than advertised and to this day, I just let the interest accrue. In the 4 years I've had the securities backed line of credit, the market done much better than the interest I'm getting hit with so I'm glad I didnt sell shares and pay LTCG.
You might even pay zero LTCG rate in future once income drops after wife retires or do like I am an plan to pass as much of it on as possible to heirs with stepped up basis or gift to loved ones while they're in zero LTCG bracket.
On other hand, you might just spread the capital gains over multiple years to optimize tax rates and avoid NIIT +3.8% which kicks in at $250k married/joint.
You might even pay zero LTCG rate in future once income drops after wife retires or do like I am an plan to pass as much of it on as possible to heirs with stepped up basis or gift to loved ones while they're in zero LTCG bracket.
On other hand, you might just spread the capital gains over multiple years to optimize tax rates and avoid NIIT +3.8% which kicks in at $250k married/joint.
Posted on 11/3/26 at 9:42 am to djrunner
I had a similar decision a few years ago. Mine was a 2nd home on a nearby lake. I bought the home by liquidating most of my taxable account. The home has appreciated nicely in the 3+ years we have owned it; 24% according to zillow. Include that in your decision. Also, you get the use of the home which does not show up in the math but has value. I also like the diversification from the stock market. I am admittedly better at making money than I am at avoiding taxes, but no regrets on my decision.
Posted on 11/3/26 at 10:55 am to KWL85
quote:
I bought the home by liquidating most of my taxable account.
learn how to borrow against assets which avoids a taxable event.
3 Ways to Borrow Against Your Assets
quote:
24% according to zillow.
zillow is not accurate. 7% MOE and maybe worse. get a real appraisal or some comps from a realtor who knows the area.
This post was edited on 11/3/26 at 10:57 am
Posted on 11/3/26 at 6:55 pm to Fat Bastard
Most of my Real estate is tied up in LLC's, can you still borrow against for a purchase outside of the LLC?
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News