Nancy’s husband died a few years ago, and her kids asked her to move closer. So, she sold her home in Idaho and purchased a home in Arizona. Although she loved being closer to the kids, she missed her neighbors and old community. Summers in Arizona can be brutal, while winters in Idaho are harsh. After many long discussions, she decided to live in Arizona for the winter and Idaho during the summer. The plan was for her to sell her home in Arizona and purchase a house close to her old home in Idaho. Then she would help her daughter buy a home with a mother-in-law suite. Everything was progressing nicely until the markets dropped 35%, but she worked with her financial advisor to keep the plan on track.
- First, we addressed the 50% down payment. With mortgage interest rates at historic low levels, together, we decided it would be prudent to make a smaller down payment.
- Since she was doing an equity share deal with the kids, and they needed to qualify for the loan payments, we did get some retrenchment from the lender.
- Next, we implemented a strategy to trim positions in her accounts that were relatively unscathed by the drop in the market.
- Additionally, we moved all the assets in the non-retirement account onto margin, allowing us to borrow against the temporarily depressed investments.
- Finally, the plan utilized a balance of IRA and non-IRA investments for tax planning purposes. Since Nancy was taking an extensive distribution and had extra money left over at the end of the month, she decided to reduce her monthly distribution.
This is a hypothetical situation based on real-life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or strategies may be appropriate for you, consult your financial advisor prior to investing.