Trying to decide if I should do a 1031 exchange or invest money.

Submitted by ih8um t3_11b3fqu in personalfinance

I am 55 with wife and two kids (10,13). I am selling a business with a property. It is valued at $1.7 million. After I pay off loans, I will have 1.1 million. Capital gains will take about $200,000 of this if I don't buy another property. That would leave me with $900,000. I have another $200,000 in savings. No other retirement besides SS. So my dilemma is should I buy a $1 million investment property, we live in a tourist area, so I could buy a waterfront condo and rent it, or should I pay the $200,000 in tax and still have $1,100,000 left. Could I invest that and make 75k to live on until SS kicks in ($36K). My house payment is $2800mo. for 14 more years. It is valued at $500k. Buying the condo would leave me with 200k and I would have to go get a job immediately, which i'm not against.

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Werewolfdad t1_j9voubb wrote

If you have no other retirement, I would definitely not concentrate 85% of my wealth in a single asset.

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wickedkittylitter t1_j9wccs6 wrote

Take the $1.1 million, invest it and get another job. With the way the market has been, you won't make $75k to live on. You'd probably lose more than that.

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silversurfie t1_j9w7h7l wrote

Did you take any property depreciation as part of your business expenses? This technically lowers your cost basis so it might increase your capital gains. So that is something to think about if it substantially increases your taxes.

Personally a combination of high dividend stocks to make your 75k/year would be the way I would lean. 60% JEPI/40%SCHD will get you there.

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