What percent would you all invest in stocks, bonds, CDs? And lump sum or DCA?

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  • #81869 Reply

      I will come into lump sum of money $400k from selling a rental. I am maxed out on retirement accounts. I planned on investing this in a taxable brokerage account in CA. I am about 2years away from retirement with 4million.

      What percent would you all invest in stocks, bonds, CDs? And lump sum or DCA?

      #81871 Reply

        Lump sum is usually the financial win, but depends upon your ability to sleep at night.

        For the other questions, depends upon your age and annual spend.

        #81872 Reply

          Tax pro here…depending on goals before you sell you may consult with your cpa/advisor about a dst. It’s a passive syndication but it allows 1031 into it due to the nature of the entity structure.

          Could be a way to receive a return on that I come. For the next 5-8 years without having that tax hit.

          #81873 Reply

            Something to consider: depending on how much you spend each year maybe just keep the 400k in a HYSA/CDs. It’ll do a couple of things:
            -allow you to be in a crazy low tax bracket during the first few years of retirement, giving you the opportunity to convert big chunks to Roth at a low tax rate.

            -Give you the confidence to retire/stay retired if/when the market gets choppy. It’s easier to spend cash when the market is down than sell securities at depressed prices. A lot of people delay retirement, reduce spending, or take on paid work unnecessarily because they struggle drawing down on their portfolio when prices go down.

            Ultimately whatever helps you feel confident in your plan is what you should do!

            #81874 Reply

              I would consider my overall target asset allocation and just make the investments based on that. With 400K you should be able to adjust to the right allocation even if you are currently off track.

              For example if you need some money to live off of once you retire in 2 years then leave it in cash or similar asset class without risk of principal loss.

              If you have enough cash for a few years post retirement then you can put it in more aggressive assets.

              #81875 Reply

                I would build a CD ladder. Ask yourself if you will need this money to bridge gaps for insurance or social security, etc. If you’re going to put it into the market, then dollar cost average. I wouldn’t rush to put it in the market.

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