What do you do with money from house sale?

Where Is the Best Place to Put Your Money After Selling a House? Put It in a Savings Account. ... Pay Down Debt. ... Increase Your Stock Portfolio. ... Invest in Real Estate. ... Supplement Your Retirement with Annuities. ... Acquire Permanent Life Insurance. ... Purchase Long-Term Care Insurance.

annuity.org - The Best Places to Put Your Money After Selling a House - Annuity.org

How thin can you pour concrete over concrete?

How Thin Can You Pour Concrete Over Existing Concrete? The thinnest that is usually used when pouring concrete, in general, is about 2 to 2 ½...

Last updated Jan 23, 2019

Can you reuse pressure treated wood?

Even reuse of pressure treated wood is problematic because cutting and sanding require precautions to avoid breathing the sawdust, although some...

Last updated Apr 24, 2020

Can I build my own shed?

Yes, with the right plans you can build your dream shed.

Learn More »

Promotion

Chicago Miller, Emily. "What Should You Do with the Proceeds From Selling Your House?" Annuity.org. Last modified December 12, 2022. https://www.annuity.org/retirement/home-sale-proceeds/. APA Miller, E. (2022, December 12). What Should You Do with the Proceeds From Selling Your House? Annuity.org. Retrieved December 14, 2022, from https://www.annuity.org/retirement/home-sale-proceeds/ Our expert reviewers review our articles and recommend changes to ensure we are upholding our high standards for accuracy and professionalism. These reviewers are industry leaders and professional writers who regularly contribute to reputable publications such as the Wall Street Journal and The New York Times. Chip Stapleton is a financial advisor who has spent the past several years of his career working primarily in financial planning and wealth management. He is a FINRA Series 7 and Series 66 license holder and CFA Level II candidate. Managing editor Emily Miller is an award-winning journalist with more than 10 years of experience as a researcher, writer and editor. Throughout her professional career, Emily has covered education, government, health care, crime and breaking news for media organizations in Florida, Washington, D.C. and Texas. She joined the Annuity.org team in 2016. People will often use the money they make from selling their house to make a down payment on a new house. But several scenarios may arise where you may not be looking to purchase a new house, you would rather save the proceeds and take out a low-interest loan, or you don’t want to spend all of it up front. This includes downsizing or moving into temporary housing, resulting in an influx of cash. Should you put that money into savings, leave it in your checking account, use it to pay down debts or invest it? The answer largely depends on where you are in life, how much access you want to the money and how long you plan not to need it. “Optimal investment strategies depend critically upon both individual risk tolerances and financial flexibility,” said David Harrison, the Howard Phillips Eminent Scholar in Real Estate at the University of Central Florida. “While the market is highly likely to return more than 3% — the average mortgage interest rate — per year over the next 30 years, it does expose investors to increased risk.” Chip Stapleton | 1:46 What is your recommendation for the best place to invest proceeds after selling your house? Financial analyst Chip Stapleton offers his guidance for investing your real estate profits.

How Much Can You Expect to Pay in Taxes When You Sell Your House?

A common question most homeowners have when selling a home is: How much of the proceeds should I plan to lose to taxes? Thanks to favorable tax laws, the answer is a lot less than you may think. According to 2022 data from the Internal Revenue Service, you are tax-exempt for up to $250,000 if you file your taxes separately (i.e., you’re not married or don’t file with your spouse) or up to $500,000 if you file jointly. This is known as a capital gain exclusion for homeowners. For example, if you purchased your home for $200,000 and sold it for $300,000, you would not have to pay taxes on the $100,000 profit. To qualify, you must have owned your house for two years and have used it as your main residence for at least two of the five years prior to your date of sale. If you owned and lived in the home for less than a year, you will likely owe taxes known as short-term capital gains. Capital Gains Exclusions If you qualify, you will not need to pay taxes on up to:

How can I insulate my shed for free?

Cheapest & free ways to insulate a shed Bubble wrap. One of the lowest cost and potentially free ways to insulate a shed is to use bubble wrap. ......

Last updated Jun 8, 2020

Can you put too much rebar in concrete?

If your mix is too wet or too dry, and you have too much reinforcement in place, cracking will occur as it hardens. Cracking happens because the...

Last updated Mar 3, 2020

Promotion

$250,000 (single homeowner)

$500,000 (married homeowners)

Take the IRS’s eligibility test to see if you qualify.

Regardless of how much you profit, you’ll want to determine how and where you want to use your money. Join Thousands of Other Personal Finance Enthusiasts Because missing out on important news and updates could cost you. STAY IN THE KNOW

Where Is the Best Place to Put Your Money After Selling a House?

Do you want to use the proceeds to lower your monthly mortgage payment? To pay down or off debt? To invest it for your retirement? Deciding how best to use the profits from the sale of your house ultimately depends on your goals — and how far you are away from retirement.

Put It in a Savings Account

The benefit of parking your money in a savings account is that it’s a low-risk option that provides you with access to the cash without fees or penalties. The drawback is having that cash sitting in a savings account for too long risks losing overall value by not keeping pace with inflation. Ultimately, you have access to your cash, but you aren’t accumulating purchase power over time. “Traditional savings accounts offer safety and security, essentially guaranteeing the proceeds will be available when desired or necessary by the investor,” Harrison said. “However, in exchange, such investments offer very low expected returns.”

Pay Down Debt

Another option is to use the proceeds to pay off debts, such as credit cards and student loans. According to an article from CNBC, the average American has $155,622 of debt in 2022, including mortgage, home equity, credit card, and auto, student and personal loans. It may make sense to pay down your debt for greater peace of mind and to help you reach your financial goals. But you should compare the interest rate you’re paying versus how much you could be earning. Depending on your interest rate — if, for example, you have the potential to earn a greater rate of return than what you’re paying in interest rates — it may make more sense to invest your money. “Using the proceeds to pay down debts often makes sense, as the costs associated with many types of consumer credit exceed the expected risk-adjusted returns on financial investments,” Harrison says. “Paying off debt also increases financial flexibility and allows borrowers to potentially increase the amount of future mortgage financing they may be able to qualify for.”

Increase Your Investment Portfolio

Putting money in an investment portfolio has benefits now and in the future, by offering a higher potential return on investment. The S&P 500, for example, has provided an average annual return of 10% for the last century. Compare this to the FDIC‘s reported .24% annual returns for the average savings account in November 2022. The drawback is you risk bigger losses, such as if the stock market plummets or crashes. If you choose this route, a financial advisor or stockbroker can recommend the best options for you.

Invest in Real Estate

How many sheets of plywood do I need for a 10x12 shed?

To cover the walls, use 10 sheets of exterior grade plywood that measure 1/2 inch x 4 x 8.

Last updated Dec 9, 2021

How heavy is a 12x20 shed?

Base Weight: 3104 lbs.

Last updated Jun 3, 2020

Can I build my own shed?

Yes, with the right plans you can build your dream shed.

Learn More »

Promotion

If you’re looking to invest in another property that won’t be your primary home, purchasing a house as a rental property is another way to generate income. The benefits of this are twofold: You can make a monthly income from renters, and sell it in a few years for a profit, as long as the housing trend continues. As Ebony J. Howard, CPA, explains, “One could build wealth by investing in multiple properties. They could start out by investing in one property and over time use the built-up equity from that property to invest in several other properties or multi-family units. Once the individual has a portfolio of properties and can effectively manage them, their wealth will reach peaks.” The drawbacks are if the housing market shifts, the amount you earn from both could dip below what you spent for the house and spend on the cost of maintenance.

Supplement Your Retirement with Annuities

As the cost of retirement continues to increase, more people are worried about what the future may hold. Annuities are a great option for those who don’t want to worry about outliving their savings during retirement. They’re also great for people wanting to take a bigger risk than parking money in a savings account but not assume as much risk as purchasing stocks. The benefits of annuities are guaranteed income for life, tax-deferred growth and no contribution limits. The drawbacks are commissions and fees, policy complexity and conservative returns compared to other investment products, such as stocks.

Acquire Permanent Life Insurance

Permanent life insurance can be a valuable way to supplement your retirement planning. Combining a death benefit with a savings option that can be used for you and your dependents, permanent life insurance provides tax-free growth, savings you can draw from when your returns are low, and estate planning benefits. It is, however, more expensive and complex than term life insurance.

Purchase Long-Term Care Insurance

annuity.org - The Best Places to Put Your Money After Selling a House - Annuity.org

How much does a garden shed slab cost?

Concrete slab cost can range from around $3000 for a small shed up to $12,000 or more for a large shed. The total cost of a concrete slab for a...

Last updated Nov 27, 2019

What cable is used for underground?

An underground wire can be made from either copper or aluminum. Copper wire can safely be bare in the ground or can have a protective jacket or...

Last updated Jun 21, 2018

Promotion

What greenhouse is best for winter?

The best greenhouse kits to buy for heavy snow are the gothic shape, the gable roof, and thirdly the geodesic dome shape greenhouse. They are all...

Last updated Mar 28, 2020

Promotion

Can a half wall be load bearing?

Is a Partial Wall Load-Bearing? If the wall is a partial wall, meaning it stops short of an adjacent wall, it may or may not be load-bearing. For...

Last updated Jul 23, 2019