Comments on: Reader Question: What To Do With A $100k Inheritance?

By: J. Money

J. Money — Thu, 24 May 2018 19:25:51 +0000

In reply to Jolie. Love it - well done :)

By: Jolie

Jolie — Thu, 24 May 2018 18:23:16 +0000

I received 102k (after taxes) about 2 years ago – here is what I did (late 40s) …

I only had 15k in retirement .. so I added in 85k giving me a NET retirement savings balance of 100k which I put in moderate risk accounts for long-term growth (not looking to make a quick buck thanks … slow and steady with me).

I took 10 k and divided it up over a couple years to travel and see family. I
blew 5k on whatever I wanted.

I totally loved how I spent the inheritance and to be able to say I all it all with me a couple years later .. I chose wisely. It will reshape my retirement outlook as I have nearly 2 decades for it to grow.

That is what I chose to do with it.

By: James

James — Mon, 25 Sep 2017 14:14:42 +0000

The alarm bells were ringing at the town house situation as well as the debt. Glad you sensibly suggested for her to create an emergency fund and get rid of the debt! Good work

By: J. Money

J. Money — Tue, 19 Sep 2017 16:12:18 +0000

In reply to Thea.

The 4% refers to the trinity study that states you can comfortably live off 4% of your investments, more or less, while in retirement. Or 25x your yearly expenses. It’s a quick rule of thumb when starting to calculate “your number” for when you can retire safely :)

Here are some good articles on it from bloggers in our space who live and breathe this stuff (whereas I’m a FIRE blogger in training! Haha…)

http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

http://www.gocurrycracker.com/what-is-your-retirement-number-the-4-rule/

http://www.madfientist.com/safe-withdrawal-rate/

By: J. Money

J. Money — Tue, 19 Sep 2017 16:08:20 +0000

In reply to Peggey. Good question! I assumed that was covered w/ the estate people figuring out her $$$ stuff, but I never asked so I could be wrong. From the little I know and have researched, a lot of inheritance stuff is tax-free, but there are certainly pockets where tax implications are HUGE, so as with everything with important $$$$ stuff, it's always good to do your own research and ask your accountant/financial planner as well if you have one :) Better to be surprised now vs later for sure!

By: Thea

Thea — Mon, 18 Sep 2017 00:03:45 +0000

Great advice and lots of perspectives. Quick hopefully not dumb question for Lee’s post – what do you mean by “4% FI” train? Thanks

By: Peggey

Peggey — Thu, 14 Sep 2017 22:19:45 +0000

Have the inheritance taxes been covered already? I feel like I’m asking a stupid question, but… it’s the “WTH” taxes that mess me up every time.

By: J. Money

J. Money — Thu, 14 Sep 2017 21:45:09 +0000

In reply to Lee.

Hey man! Glad to hear the advice helped!

I’d totally take you up on that planning/daycare article, however not having mastered either of those it’s probably best I do not :) I will say though that it’s amazing what you can get used to once kids come into the picture. Humans are pretty damn adaptable, so plan or no plan you will get through it all just fine. The biggest worry is *before* they’re born and praying they come out happy and healthy!! Most of which are outside of your control :(

By: J. Money

J. Money — Thu, 14 Sep 2017 21:42:03 +0000

In reply to Adam. Wowwwww good for you!!! She would be so happy to hear!!

By: Lee

Lee — Wed, 13 Sep 2017 15:57:48 +0000

This felt a lot like my situation back in February when my mom passed away. I inherited some money but also farm land and shares of a farming corporation. So, I went from making 26k a year to a darn bit more depending on the crop season. I also spoke to J Money about it and took his recommendation to sit on it for a while, which I did. My debts were already paid off, we had done the Dave Ramsey debt snowball a while back so credit cards and cars were paid off. I inherited a house that is paid for, so we could wait. Oh! My wife does have 30k in student loans which is our only debt. So, I’m definitely a fan of the get out of debt and don’t go back club. Use those freed up funds to buffer your accounts and enjoy less stress. I’m hoping that I can one day jump on the 4% FI train.

So, I invested it to grow it to help with retirement and so one day I can pass it on to my kids. Life insurance policies were found and those now fund an emergency fund.

I love the baby advice, we are planning for one and a lot of this I have written down and plan to make sure we execute when the time comes around. J should do an article about planning for kids and daycare some day, I’d love to read it.