Author Topic: Inheritance: invest vs pay off mortgage vs ... ?  (Read 1851 times)

NorthernDreamer

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Inheritance: invest vs pay off mortgage vs ... ?
« on: March 03, 2017, 11:48:15 AM »
I recently received a decently large inheritance. I plan to contribute $4800 to our family RESP to maximize the government matching for the year, and max out my husband and my TFSAs and RRSPs once I figure out our current contribution room (since honestly, maxing them out right now never seemed in the realm of possibility so I didn't keep very good track of that).

Once I do that, we are looking at still having approximately $70,000-$90,000 "left over". We are in the process of renewing our mortgage, which comes due in April. We still owe $200,000 but are probably going with a 5-year variable at 2% interest (crazy low, I know). I figure we can throw the money at the mortgage, start a cash investing account at Questrade, or do a combo of both. Right now we are thinking of putting $20,000-$30,000 toward the mortgage and put the rest in a cash account. We currently invest mostly in Vanguard ETFs.

Any tips to save taxes? The largest chunk of that money is a pension payout and is being taxed 30% at the source (thank goodness) but I think this is going to be taxed at 40% +. My RRSP contribution room is not huge since I have a pension at work. I have the lower income (for most years except for 2017, with this inheritance) so I'm guessing a cash investment account would be better off to be in my name.

Is this a situation I should find an accountant or fee-for-service financial advisor? Or is it fairly cut and dry?

Thanks. It's been a few months, my head is still spinning a bit and it's odd balancing grief with wanting to make a smart decision with this mini-windfall.