Spouse inherited $3 million

[Anonymous]

My spouse recently inherited $3 million, increasing our net worth from just over $2 million to now north of $5 million. Our household income is about $210,000 a year and our suburban townhouse is paid off. Our budget is well defined and I am not sure whether we should change anything. Investments are all with Vanguard in diversified index funds. We are ages 49/50 and our only child‘s college fund has enough for her undergraduate education which will begin in two years. There will be no more inheritances. I have always managed the finances in our family but I am unsure whether to make any revisions to our budget. We are saving 1 401K, and two back door Roth IRAs plus a family HSA.

The only place money could come from in our budget is if we reduced savings. Would you do this? My spouse works part time and high don’t have any plans to retire until I am closer to 60. I don’t think we have enough money yet to handle the cost of early retirement health insurance and we both come from long-lived families.

[Anonymous]

I think you can loosen the purse strings a bit, sure, without changing your overall financial planning.

Congrats, OP!

Also remember that inheritances are the property of the individual, not the marriage, unless part of it has been used for joint expenses, and then it's debatable.

[Anonymous]

you will get bored in early retirement. biggest mistake people make.
jut bank the money and live a relaxed life knowing you have the money to relax.

[Anonymous]

I'd ask spouse to use some inheritance money for a separate 529 for your kid's grad school. If they don't use it, assign that 529 to your first grandchild. Your spouse can switch the name of the beneficiary at any time.

[Anonymous]

I would start taking better vacations.

[Anonymous]

Don’t retire early but also don’t stay in jobs you hate. Find a job you like even if it pays less.

[Anonymous]

We discussed keeping the inheritance separate but spouse was adamant that we commingle it. We have a strong marriage and I think there is gratitude that I have been the primary wage earner for our entire marriage. That’s a good idea to pump up the 529 since our daughter has been talking about graduate school. She hasn’t decided but it would be good to begin funding that. We could always transfer it to a grandchild if necessary. If we were to take nicer vacations I would have to reduce savings. That would be hard for me but I guess our kid will only be with us a few more years so it’s probably worth it.

I appreciate the reassurance that early retirement is not the answer here. I didn’t think so. And I don’t really want to retire yet.

[Anonymous]

Anonymous wrote:We discussed keeping the inheritance separate but spouse was adamant that we commingle it. We have a strong marriage and I think there is gratitude that I have been the primary wage earner for our entire marriage. That’s a good idea to pump up the 529 since our daughter has been talking about graduate school. She hasn’t decided but it would be good to begin funding that. We could always transfer it to a grandchild if necessary. If we were to take nicer vacations I would have to reduce savings. That would be hard for me but I guess our kid will only be with us a few more years so it’s probably worth it.

I appreciate the reassurance that early retirement is not the answer here. I didn’t think so. And I don’t really want to retire yet.

I'm not sure I understand the bolded. You would have to reduce your pre-inheritance savings balances? your regular contributions to those savings? Why?

If you are saying it would mean spending some of that "extra" 3M to take a vacation, well of course. But then what even is the question you are asking?

[Anonymous]

Anonymous wrote:you will get bored in early retirement. biggest mistake people make.
jut bank the money and live a relaxed life knowing you have the money to relax.

in the bank, not invested? Even with high inflation?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We discussed keeping the inheritance separate but spouse was adamant that we commingle it. We have a strong marriage and I think there is gratitude that I have been the primary wage earner for our entire marriage. That’s a good idea to pump up the 529 since our daughter has been talking about graduate school. She hasn’t decided but it would be good to begin funding that. We could always transfer it to a grandchild if necessary. If we were to take nicer vacations I would have to reduce savings. That would be hard for me but I guess our kid will only be with us a few more years so it’s probably worth it.

I appreciate the reassurance that early retirement is not the answer here. I didn’t think so. And I don’t really want to retire yet.

I'm not sure I understand the bolded. You would have to reduce your pre-inheritance savings balances? your regular contributions to those savings? Why?

If you are saying it would mean spending some of that "extra" 3M to take a vacation, well of course. But then what even is the question you are asking?

I guess it just feels weird not to save as much as we had been saving before. What I mean is that if I wanted to take nicer vacations, I would need to reduce our current savings levels. I can’t imagine withdrawing from the investments to do so. I guess that wouldn’t make any sense anyway. So I suppose my question is would you reduce your savings goals because you now had more in your investments?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We discussed keeping the inheritance separate but spouse was adamant that we commingle it. We have a strong marriage and I think there is gratitude that I have been the primary wage earner for our entire marriage. That’s a good idea to pump up the 529 since our daughter has been talking about graduate school. She hasn’t decided but it would be good to begin funding that. We could always transfer it to a grandchild if necessary. If we were to take nicer vacations I would have to reduce savings. That would be hard for me but I guess our kid will only be with us a few more years so it’s probably worth it.

I appreciate the reassurance that early retirement is not the answer here. I didn’t think so. And I don’t really want to retire yet.

I'm not sure I understand the bolded. You would have to reduce your pre-inheritance savings balances? your regular contributions to those savings? Why?

If you are saying it would mean spending some of that "extra" 3M to take a vacation, well of course. But then what even is the question you are asking?

I guess it just feels weird not to save as much as we had been saving before. What I mean is that if I wanted to take nicer vacations, I would need to reduce our current savings levels. I can’t imagine withdrawing from the investments to do so. I guess that wouldn’t make any sense anyway. So I suppose my question is would you reduce your savings goals because you now had more in your investments?

Yes-you should speak to a reputable (fee based) financial planner and get a target number and adjust monthly saving based on your new situation

[Anonymous]

I would not reduce savings you are making from marital assets.

This inheritance is NOT yours, unless possibly he comingles it and it becomes too hard to trace.

If you divorce, you will not be entitled to any of it. And if it is in trust, it is likely it will go to your child, not you.

So keep up the savings from your marital assets (meaning anything either if you earns). Otherwise you will be more poor if you divorce.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We discussed keeping the inheritance separate but spouse was adamant that we commingle it. We have a strong marriage and I think there is gratitude that I have been the primary wage earner for our entire marriage. That’s a good idea to pump up the 529 since our daughter has been talking about graduate school. She hasn’t decided but it would be good to begin funding that. We could always transfer it to a grandchild if necessary. If we were to take nicer vacations I would have to reduce savings. That would be hard for me but I guess our kid will only be with us a few more years so it’s probably worth it.

I appreciate the reassurance that early retirement is not the answer here. I didn’t think so. And I don’t really want to retire yet.

I'm not sure I understand the bolded. You would have to reduce your pre-inheritance savings balances? your regular contributions to those savings? Why?

If you are saying it would mean spending some of that "extra" 3M to take a vacation, well of course. But then what even is the question you are asking?

I guess it just feels weird not to save as much as we had been saving before. What I mean is that if I wanted to take nicer vacations, I would need to reduce our current savings levels. I can’t imagine withdrawing from the investments to do so. I guess that wouldn’t make any sense anyway. So I suppose my question is would you reduce your savings goals because you now had more in your investments?

Yes, of course. It seems illogical that you wouldn't realize you had now "met" your savings goal. Right? I have heard that spending 1% of an inheritance is OK, as a rule of thumb, and you don't even need to spend that much. I would withdraw some to take nice vacations.

Why? Because none of us are guaranteed long lives. Rather than waiting for retirement, I think it's reasonable to travel and do some nice things now. You don't know what the future holds. A friend of ours just died in his fifties.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We discussed keeping the inheritance separate but spouse was adamant that we commingle it. We have a strong marriage and I think there is gratitude that I have been the primary wage earner for our entire marriage. That’s a good idea to pump up the 529 since our daughter has been talking about graduate school. She hasn’t decided but it would be good to begin funding that. We could always transfer it to a grandchild if necessary. If we were to take nicer vacations I would have to reduce savings. That would be hard for me but I guess our kid will only be with us a few more years so it’s probably worth it.

I appreciate the reassurance that early retirement is not the answer here. I didn’t think so. And I don’t really want to retire yet.

I'm not sure I understand the bolded. You would have to reduce your pre-inheritance savings balances? your regular contributions to those savings? Why?

If you are saying it would mean spending some of that "extra" 3M to take a vacation, well of course. But then what even is the question you are asking?

I guess it just feels weird not to save as much as we had been saving before. What I mean is that if I wanted to take nicer vacations, I would need to reduce our current savings levels. I can’t imagine withdrawing from the investments to do so. I guess that wouldn’t make any sense anyway. So I suppose my question is would you reduce your savings goals because you now had more in your investments?

What were your pre-existing savings goal and what was the time horizon you had planned to meet them?

Presumably you can take a nicer vacation without affecting that, assuming you have not ALREADY met them with the inheritance, so no "reduction" required.

I'm not trying to be argumentative here PP, but I don't think you're making sense.

[Anonymous]

Don't revise budget. Stay the course and have a fabulous retirement post 65 once you get there.
If you wish, take nicer vacations now but there's no reason to adjust things if you don't want t0