My wife and I are considering selling our house next year, moving to a cheaper city (Albuquerque), and renting. We owe $19,000 on our mortgage, and the Zillow estimate of our home is $960,000 (about $425,000 cost basis).
If I'm calculating it correctly, the proceeds of the house combined with our savings in tax-advantaged accounts (ROTH, traditional, 401K, and SEP totaling about $190,000) should get us to FIRE. Our only other debt is a $150,000 HELOC we took out to build a second home, which is netting about $1,500 per month in nightly rental income, and which will be paid off with the sale of our primary home. We may sell that house as well. We may eventually want to build or buy another house in New Mexico to live in, probably around $250,000.
I am 41, and my wife is 33. We will probably both want to take on some part-time work after our son starts school in ~3 years.
I'm looking for advice on how to invest the proceeds of the house sale for long-term income. Would the best approach be to just put it into a taxable account and invest in index funds, or a mix of index and bond funds, or target-date funds?
I am assuming that the bulk of the capital gains on the house sale will be shielded. Are there any other tax concerns we should be thinking about? Does our safe withdrawal rate change given that the bulk of our retirement savings will not be in tax-shielded accounts?
Thank you for your advice. I am new to the idea of FIRE, so please let me know if there is anything obvious that I am overlooking.