Retiring Soon? Sold Your Home? Now Go Buy Some Stocks
Investing a real estate windfall for retirement is trickier than it was in the days when bonds were rewarding and safe. Here are some do’s and don’ts.
Now what?
Photographer: David Paul Morris/BloombergThe real estate market may be cooling slightly, but those who have sold their homes recently or plan to will still be reaping big gains from Westchester, New York, to Oakland, California. Unfortunately for those close-ish to retirement, one of the usual go-to places to park extra cash — bonds — has become a no-go zone. With low interest rates and rising inflation, buying more bonds, often the core of a soon-to-be-retiree’s portfolio because of their relative safety, isn’t very attractive. Low interest rates yield paltry incomes and high inflation could eat away at the bond’s market value.
So what else should someone who isn’t retiring tomorrow, but plans to stop working within 10 years or so, consider doing with extra money sitting in a bank account after selling a home and buying or renting their next one?