Author Topic: What should I do with my inheritance? (updated)  (Read 965 times)

ahava18

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What should I do with my inheritance? (updated)
« on: December 15, 2018, 12:51:26 PM »
Hi guys,
I recently inherited about $43,000 from my grandparents. I still have $56000 in student loans at 5.07% interest with monthly payments of $700-800. My husband and I have an emergency fund with $14000. We are planning on starting a family soon so will use some of the money to bump up the emergency fund to $20,000, pay off some medical bills that we are expecting to hit this month, and also cover maternity leave. I have a $2500 FSA (not an HSA) but it won't cover costs incurred before January 2019 and my husband's procedures will be in December.

That still leaves about $35,000. My husband and I have 2 retirement accounts through work that we are contributing 10% of each paycheck to. We are currently contributing more than the employer match to both accounts. They only match up to 5%. We also have 2 Roth iras that are invested in index funds. Our total retirement savings between all four accounts so far is about $25,000. We have already paid off about $50,000 in student loans so we haven't been saving aggressively yet. Our combined annual income pre-tax is about $100,000 per year.

Here are four options I am considering:

1. Put all of the remaining money towards the student loans
2. Max out my Roth IRA for this year/next year and/or open a taxable investment account or a traditional IRA for the rest of the money and invest it all in index funds
3. Save for a down payment on a house (we still aren't sure where we want to live and our lease isn't up until 7/2019. Currently paying $1300/month for a 2 bedroom apartment.)
4. Some combination of the above

What do you all think? I really appreciate my grandparents generosity and want to use the money wisely! Advice is appreciated!
« Last Edit: December 16, 2018, 12:44:10 PM by ahava18 »

cchrissyy

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Re: What should I do with my inheritance?
« Reply #1 on: December 15, 2018, 01:00:15 PM »
fully fund both IRAs right now for 2018 and in a few weeks do the same for 2019

your student loans are high enough interest rate that I'd put the majority of the funds to paying them down.

but if not that, then I'd put them in a brokerage account in index funds like you said.

Cwadda

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Re: What should I do with my inheritance?
« Reply #2 on: December 15, 2018, 02:00:51 PM »
I think it might help knowing a bit more information. You could even consider turning this topic into a Case Study. https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

For example, we don't know whether you are maxing your 401(k)s yet. We also don't know if you have HSAs.