Ask Terry Questions home sale proceeds

home sale proceeds

By Terry Savage on March 29, 2014 | Housing / Real Estate

Hi Terry, we are in the process of selling our home of 38 yrs and moving to Florida, we’ve already purchased home in Fla. We’d like to know what is the best thing to do with the proceeds of the sale where it will do the most for us.

Thank you

Terry Says:  Well, first congratulations — and enjoy Florida.  Advice that you request is difficult to give in a vacuum.  You have reached the stage where, of course, you want your money to work for you — but you don’t want to take much risk.  And yet you need the growth and inflation protection that stocks give — over the long run.  Have you ready my book:  The Savage Number.  It explains these issues, and it also explains the concept of Monte Carlo modeling — And, no, it’s not gambling. It’s actually the science of modeling returns that will give you the best chance of not outliving your money — creating an investing AND withdrawal program designed to reflect your own needs and risk tolerance.  Most financial planners say they use this type of assessment.  But since you’re starting fresh, I’d suggest you go to one of the best — and least expensive.  If you move at least some of your home sale proceeds just to a Treasury money market at T. Rowe Price, they will do their Retirement Income Modeling service at NO FEE.   It’s worth going through the process to understand more.  They look at ALL your assets, your expected expenses in retirement, and let you know how to best maintain your lifestyle (and, if it’s your goal, to leave some of the money to your heirs.)

That would be my best advice — to seek THEIR advice.  In the meantime, the rest of the money can just sit in a bank money market fund — You won’t lose money there, although at todays low rates, you’ll fall slightly behind inflation. That’s why you need a plan.  And don’t forget to make a new will, reflecting your residency in Florida.  On large estates, Illinois residents pay an extra estate tax!



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