I'm looking for some more pointed advice for investment as I've recently sold my home and am looking at retirement a bit harder. I have $400k to do something with and its not doing much in my savings besides looking pretty.

Currently I have a new mortgage at 580k with a 2.75Apr. No other real bills besides the usual revolving stuff.

I put 1k a month into a Roth for myself and my wife.

I'm screening a few financial advisors however they obviously want to sell themselves and their products and so I'm balancing their initial advice against that.

I am about 12 years from primary work retirement. At that time I currently plan to move to the Northern midwest where the cost of living currently drops significantly from my current PNW. My job retirement will get me $3520 a month as current. I have no issues with and would likely seek a part time "something to do" job in retirement.

I was advised against paying my house off as its not my forever home and I have a great interest rate. I wouldnt hate living here forever but the cost of living is quite high and I dont like the idea of where my tax dollars go.

I was advised to check out maxing out my workplace contributions to our deffered compensation program as I can bump up my retirement and it comes out pretax which helps keep me in a lower bracket.

I can also invest however then I could of course lose it all. The rate of reasonable return would put my earnings well over paying down my mortgage but with obvious risk.

Your thoughts on all this are appreciated. Also what do you think of the advice provided above?

If it were me, I’d probably put all, or at least 80% of the $400k into the mortgage. Yeah, you’ve got a great rate - and it may not be your forever home. Then I’d pay off the mortgage in the next 2-4 years. When you sell the house, you will get a FAT check. Plus if you are paying down at say $5k per month, when the house is paid off you can invest that amount each month.

My gues is the housing market in the PNW will continue to be strong. While I love the market, and do invest aggressively, it’s stability over the next few years may not be assured; COVID, political & civil unrest, etc.

That’s my 2 cents.

I wouldn’t put any of your $400K into your house. Cash is king, so keep every but of it you have. Plus, any of your $400K from the sale of your primary house should have been tax free. Make tax free money work for you in as liquid a position as you can afford, putting back into another house simply keeps it there until a re-fi or another sale.

I’m in a similar strait as you. With that understanding dividends are going to be my supplemental income source so that’s my inversement focus. I’ll, hopefully, never have to touch the principle investment. An annual 6% dividend return on your $400K principle is another $2,000 a month. With your pension you’re already at over $60K a year. Then there’s SS.

This really is a personal choice and you should take EVERY suggestion wit ha grain of salt.

Lastly, what does your wife say?

I wouldn't put it into your house, but I think the time to quadruple it in the stock market has passed. You can invest it and make more than 3% ROI though.

I follow Dave Ramsey's advice. Set your 410k, preferably match and then Roth, to 15% of your total income. Then, I would pay off any debt you have and finally the house. Make sure you retain a 3-6 month emergency fund. They may say that, but you could be saving the interest AND save your mortgage payment every month for investing. I recommend good growth stock mutual funds but I would consult an investment professional that you can trust. If you feel slimy after talking to them, RUN.

Many people that call themselves investment professionals are really just financial services sales professionals.
Don't depend on any of them to tell you where to put your money, at least to start. You need to educate yourself so you can have some idea if they are telling you good advice or just hyping themselves and their products.
I would read on www.clarkhoward.com and Dave Ramseys sites, Vanguard and Fidelity too for good information.
As you may have already found out, you are entering shark infested waters and a bad move could really kill some of your retirement plans. It isn't rocket science and going for the big score has just as much risk to wipe much of your saving out. Slow and steady, don't go for the glitter.

Develop a cash flow strategy and have your money working for you. Do your research into real estate investments. You can invest passively and get 8-10% returns annually. Why pay off 2.75% mortgage interest when you can use the money to earn substantially more... Do it right and real estate investments can potentially help you pay less taxes. Look up tom wheelwright on youtube.

I agree with SIG4EVA, maybe a little different priority scheme.

1. Make sure you have a minimum 6-month emergency fund. I know of some who are still out of work since March due to the KungFlu.
2. Maximize any work-related 401(k) to get the full company match. Depending on when you retire, try to fully fund your company 401(k) in the year you retire (I did this).
3. Fully fund any traditional or Roth IRA for the year.
4. Pay off any "bad' debt, like CC debt.
5. At a minimum, you could increase your mortgage principal in your monthly payments, if your bank or mortgage company allow this.
6. Place the remainder in a money market account for the time being, while you research where to invest it.

It is difficult for us to give any investment advice, as we don't know your age, work status, family income sources, etc. As 220-9er stated, Vanguard and Fidelity are good places for information; we have assets in both. Good luck.

I’d probably leave the mortgage alone unless the payments are a drain.

You mention other “revolving stuff”. Do you maintain CC balances or pay in full each month? If the former, use some of the proceeds to pay off the CC debt and keep it paid off.

As to increased deferred comp contributions, make sure you know of the exact type of plan and whether those plan assets are subject to the employer’s creditors. If so, you might still contribute but you need to be aware of the incremental risk.

I agree that house debt is good debt, but if you want to reduce your monthly payment, you might be able to apply some of the cash to recast your mortgage if your mortgage company has that feature. For a small fee, you can apply cash to the mortgage and the term and rate stays the same, but it lowers your payment. With the balance of cash (or a portion), I'd spread it over several blue chip dividend paying stocks.

I don't think I would put it on the house. Politicians can wipe out that value easily

Follow Nosler's recommendation.

Get a good safe.
Buy 100 grand in silver.
Do something else with the other 300.

As a retired Investment professional the best advice I can give you is to subscribe to the American Association of Individual Investors. It has a world of information, no sales people, shadow portfolios, podcasts, tutorials, mutual fund scoop, the personal investment world at your feet.

I have been a subscriber for decades and have kept it up into retirement. I wholeheartedly recommend it to friends, family whoever wants to navigate the waters and is looking for some answers.

Check your email.

Health Savings Account (HSA) has not been mentioned.

Most HSA’s have an option for investing.
Max out the HSA contribution.

Tax free going in, tax free growth, tax free coming out.
You can use your HSA money for health care needs or pull it out in retirement.

Take a look at your HSA options if available.
I see the HSA as a superior investment to 401k and would first max out the HSA.
Give it a look if available.

Agreed on the HSA.

I contribute to an HSA but not for investment purposes. Instead, it is combined with a high-deductible plan and thus serves to reduce our total out-of-pocket medical costs, after tax.

Unlike an FSA, it has the advantage of being able to be carried / applied against a subsequent year’s cost and it does have investment choices within it, but I’ve been withdrawing from it to reimburse ourselves for our high medical costs that otherwise would fall below the AGI-based threshold.

I guess that I am lucky with my options for HSA.

It is very true that most do not use there HSA’s for an investment option, even when the option is available to them.

It is also true that there are significantly fewer investment options, however I have been doing rather well with my HSA investment selections.

280nosler, brought up some good points.

Looks like I have plenty of things to look into. Thank you for all the advice so far!

In the meantime read Rich Dad Poor Dad by Robert Kiyosaki.

quote:

Originally posted by bustabuddy:
Get a good safe.
Buy 100 grand in silver.
Do something else with the other 300.

Buy 100K in silver now?