What to do with 150,000 inheritance?

[GoBears]

How do you intend to address LTC? DW and I are self-insuring and intend to allocate much, if not all, of any inheritances to our potential future LTC needs. If you are self-insuring, you might consider investing some of the inheritance with the idea it can be used for LTC if needed in the future.

 

[RobbieB]

Buy 20 grand I bonds, 70 grand equities and stick 60 in the emergency fund

 

[CincyDave]

^^^ Do you have a Christmas Club account too?

Remember those?

LOL. I remember them. Man I must be old

 

[RetiredHappy]

My husband likes the envelope system but I oppose it, so we don't do so. Money is fungible, withdraw money when need arises.

 

[NYC1967]

My husband likes the envelope system but I oppose it, so we don't do so. Money is fungible, withdraw money when need arises.

I like to see the money separated...

So I have "an envelope" for Vacation fund money

"envelope" for car maintenance etc - I like to see the money separated/allocated

 

[NYC1967]

How do you intend to address LTC? DW and I are self-insuring and intend to allocate much, if not all, of any inheritances to our potential future LTC needs. If you are self-insuring, you might consider investing some of the inheritance with the idea it can be used for LTC if needed in the future.

I guess what we don't withdraw from the IRA's will be used for LTC...

As for Insurance, we will be able to keep our insurance in retirement from each of our companies.

 

[meleana]

If your goal is $150,000 in emergency savings, why not use the inheritance for that and it’s done?

Then take the extra $37,000 you already have and invest it in a mutual fund or whatever.

Simple.

 

[highlan875]

In your mind, who would effect your lifestyle spending

In your mind, who would effect your lifestyle spending

HI everyone,

I will be inheriting about $150,000. Help me decide what to do with it? Put in IRA? Ibonds to build up cash savings? any other suggestions welcome.

This is where we are financially:

UPDATED 1/2022 -
Him wanting to retire 6/2027 (60y) - Her 6/2030 (62y)


Him 55 -- Her 54- Emergency Savings $37,500 (goal 150,000 cash)

Own Home - No Debt
Combined yearly salary about - $155,000 - him $110,000 - her $45,000

TOTAL COMBINED PORTFOLIO $1,355,470.00 (50% stock/50% bond)



HIM Current 401k Contributions (6%) -company matches 82% of our 6% )

HER Current 403b Contributions (13%)

HER current contribtions - $500 month to ROTH (VTSAX)

Two Children 19/21
NY 529 $41,300 (will be used in the next 2 1/2 years for younger sons college - will cashflow when it runs out)
Currently cash flowing older sons college - graduates in June


HIM Projected Social Security @62yr ($25,250)….. @67yr ($37,000)…..@70yr ($46,000)

Projected Full Pension (no penalty) @ 57 years old lump sum approx $700,000 or
Full Life $28,800 yr (we would take 100% spousal so would be reduced) NO COLA

HER Projected Social Secuirty @62yr ($15,500)…..@67yr ($23,400)

Pension (1) @ 63 years old $12,500 Full or $11,500 spouse would get $953 NO COLA
Pension (2) @ 65 years old 9/2032) $8,700yr NO COLA (spouse would get 50%)

 

[imnontrad]

1) Make a donation in memory of the person you inherited the money from.
2) Max 401K and 403B.
3) Open up and max individual IRA.
4) If eligible, fully fund HSA.
5) Take a nice vacation
6) Put the rest in emergency fund

 

[a60dan]

I’d “stick with the plan” and invest accordingly, including full funding for emergencies.

 

[ERhoosier]

Sorry for your loss.
But I'll bet your loved one would want you to make the best use of that inheritance.

Personally- I would buy $20k limit (self & spouse) of iBonds (as best inflation hedge going), max your 401k & 403B (remembering that 403B may not offer ERISA protections), top up the emergency fund, and invest the rest per your target AA. And spend a bit for a vacation if you like.

BTW- you are VERY wise to recognize the NO COLA feature of those pensions in your planning. Seen too many folks forget that important detail.

 

[steelyman]

I’m not aware that you can fund a 401(k) or 403(b) with an inheritance. If so, that would be good.

 

[matjung]

I think I would split the 150K into 10 peaces 15K each. And decide at each peace what to do with it.
Like peace1 for the Emergency Fund.
Peace2 for Holiday Budget
Peace3 Emerging Market Bonds
Peace4 US Value Stocks
Peace5 EU Value Stocks
Peace6 APAC Value Stocks
Peace7+8 a new Tesla
Peace9+peace10 US money market funds

 

[almost there]

SQQQ

 

[target2019]

HI everyone,

I will be inheriting about $150,000. Help me decide what to do with it? Put in IRA? Ibonds to build up cash savings? any other suggestions welcome.

This is where we are financially:

UPDATED 1/2022 -
Him wanting to retire 6/2027 (60y) - Her 6/2030 (62y)


Him 55 -- Her 54- Emergency Savings $37,500 (goal 150,000 cash)

Own Home - No Debt
Combined yearly salary about - $155,000 - him $110,000 - her $45,000

TOTAL COMBINED PORTFOLIO $1,355,470.00 (50% stock/50% bond)



HIM Current 401k Contributions (6%) -company matches 82% of our 6% )

HER Current 403b Contributions (13%)

HER current contribtions - $500 month to ROTH (VTSAX)

Two Children 19/21
NY 529 $41,300 (will be used in the next 2 1/2 years for younger sons college - will cashflow when it runs out)
Currently cash flowing older sons college - graduates in June


HIM Projected Social Security @62yr ($25,250)….. @67yr ($37,000)…..@70yr ($46,000)

Projected Full Pension (no penalty) @ 57 years old lump sum approx $700,000 or
Full Life $28,800 yr (we would take 100% spousal so would be reduced) NO COLA

HER Projected Social Secuirty @62yr ($15,500)…..@67yr ($23,400)

Pension (1) @ 63 years old $12,500 Full or $11,500 spouse would get $953 NO COLA
Pension (2) @ 65 years old 9/2032) $8,700yr NO COLA (spouse would get 50%)

Right away I would put the money in something like Discover to get some interest as I decide further.

I would be concerned about having 10% cash (your $150,000 target). Inflation eats that every year.

I'm not sure you can add this to an IRA given your max Roth contributions. You could back-door, but maybe it makes more sense to build a brokerage of tax-efficient and perhaps municipal ETF.

I would give my children this advice if they were 50/50 AA: put 10,000 each month into equities. I'd also consider what debt and mortgage they have.

 

[Oakster]

Yes, that is pretty much what I was thinking of doing - but just wonder if I should invest some in equities in my IRA or ROTH to grow

I would max out my Roth options for both if it were in my hands. Get that money growing tax free, with no RMD's. That would be my first step.