Ask Terry Questions selling stock to purchase home

selling stock to purchase home

By Terry Savage on October 08, 2018 | Housing / Real Estate

My husband(77) and I(71) would like to purchase a home in Philadelphia to be closer to our children. Most of our income comes from Social Security and our RMD from our retirement IRA’s and we would like to do this without a mortgage. We don’t have enough equity in our current home to make this happen, but I do have some stocks that I could sell to help make this work. What do you think of selling stock at our age to purchase a home and tax consequences? Our total income is in the $60,000 range and in the previous years, we did not need to pay any taxes.
Thank you for any advise you can give.

Terry Says

Well, it’s hard to know how to give you specific advice without knowing more about your financial picture. You didn’t say whether the stocks you would sell are inside your retirement IRAs — and that makes a big difference in my answer. And even if they are outside your IRAs, are they dividend-paying stocks that give you income?

So let me say, partially blindly, that I “get” your idea of moving, and of paying cash for your home. (In fact, as retirees, you could not get a mortgage.) And if these stocks are OUTSIDE your retirement plan, I don’t think it’s a bad idea to sell some of them. Remember, you’ll have to pay capital gains taxes on any gains you have, so set some money aside. That just might put you in a higher income level and impact your cost of Medicare, so consider that possibility.

Now, if you are selling stocks inside a retirement plan and withdrawing the money, not only will you pay ordinary income taxes, but you will deplete your future RMDs — and that might impact your ability to pay the property taxes, insurance, etc on your new home. Consider that, as well.

Depending on your exposure to the stock market, you might look back and be glad you sold some stocks near the (likely) end of a very long bull market!

The one good thing about owning the home free and clear is that if you really plan to live there a long time, you could always get a reverse mortgage to draw tax-free money OUT of the home to help with the upkeep.

So this is a “big-picture” decision, and depending on your situation there might be other considerations. That’s why I’d suggest you consult a financial planner in your area. Find a fee-only FIDUCIARY financial planner at Or check the website of the fee only financial planners at



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