Anonymous wrote:

Anonymous wrote:I'm not seeing as many people who say they would pay off their mortgage as I would expect. Is there a reason? Not a smart idea?

I would pay off mortgage (500k), and then split the rest between college and retirement. Fun ways to spend the money would come monthly, since I would have reduced our expenses/amt going to savings by thousands each month.

Technically not the best use of the funds if your mortgage rate is low. In theory you are better off investing the funds and generating a 6% or 7% average annual return than paying off a mortgage at 3%.

Yeah, but piece of mind that monthly expenses are close to nothing would be amazing!

I would consult an expert on the smartest mortgage balance to carry, with regard to tax benefits, and refinance to get the best rate on that sum. (PP, I was always told it was smart to have a mortgage for the tax deduction, and I would expect that's especially true with these rock-bottom rates. But then, it was sort of a conventional-wisdom thing, so that's why I'd want to talk to an advisor.) I expect it would cost me around $150k to get where I want to be, mortgage-wise.

Spend maybe $10-15k on a few little upgrades around the house. Replace the 12 year old car. Take a proper vacation, instead of yet another road trip to stay on the couch of a family member.

And I'm done! The rest can go to college and retirement savings. The emergency fund is already in good shape.

Anonymous wrote:I'm not seeing as many people who say they would pay off their mortgage as I would expect. Is there a reason? Not a smart idea?

I would pay off mortgage (500k), and then split the rest between college and retirement. Fun ways to spend the money would come monthly, since I would have reduced our expenses/amt going to savings by thousands each month.

My mortgage is at 3.5%. A lot of investors can make a percentage return that exceeds that, which is why they're saying they wouldn't. I don't think I would. I would finally get rid of our last student loan, buy a couple of investment properties, do some updates to our current house, get a convertible, and throw the rest at college and retirement. My husband wants to buy a boat eventually, so we would have to have that fight.

Anonymous wrote:I'm not seeing as many people who say they would pay off their mortgage as I would expect. Is there a reason? Not a smart idea?

I would pay off mortgage (500k), and then split the rest between college and retirement. Fun ways to spend the money would come monthly, since I would have reduced our expenses/amt going to savings by thousands each month.

Technically not the best use of the funds if your mortgage rate is low. In theory you are better off investing the funds and generating a 6% or 7% average annual return than paying off a mortgage at 3%.

I'm not seeing as many people who say they would pay off their mortgage as I would expect. Is there a reason? Not a smart idea?

I would pay off mortgage (500k), and then split the rest between college and retirement. Fun ways to spend the money would come monthly, since I would have reduced our expenses/amt going to savings by thousands each month.

I would invest it with the goal of producing enough income to pay private school tuition for the next 6 years.

OP here. So far we did the cry with relief.

Pay off student loans, credit cars, and both cars, put money away for kids' education, nest egg, put some money in a retirement fund, give a little to both of our mothers. Spend some to enjoy it now. Get new computer and a few new clothes, and a new sofa that doesn't have a board under it.

Student loans $300K
Cars $14K
credit cards $10K
nest egg: $85K
Moms $100K ($50K each)
Spend now: $6K
Kids' college: $200K ($100K each)
Retirement: $250K

I would sit down and cry my eyes out with relief.

Then I'd do what the PPs have suggested.

Do you have any investments other than retirement plan? If not, you need to set the money somewhere safe and start learning. There are layers of knowledge needed to make this work out well over time. Taxes, types of products, and more. It is some real money and can over some years time change your situation in life - unless you already have a similar or larger amount of investments.

Congrats, OP. The first thing you should do is put the money in a safe bank account for 6 months and do nothing. Grieve your loss, adjust your worldview.

When this happened to me, six months after inheriting the money, I 1) paid off the mortgage; 2) fully funded the kids' college accounts and 3) invested the rest in a diversified portfolio of stocks, bonds and ETFs.

Sorry for your loss and good luck making the right decisions for you.

Cover college and private school for 5 kids (we only have 3, but I'd get started on #4 right away).

Buy a minivan.

Take the family on an international trip to Israel - maybe $15K.

Put the rest (assuming there's any left) in savings.

We inherited a little less than that recently. We've been putting more toward retirement and college but haven't done much else. We've also kept on to one of the properties we inherited as an investment/rental property (our stake is about $100k).

We're also planning to use some for some needed improvements to our house that will help us stay there. Without the money we would just have increased our mortgage.

Anonymous wrote:I inherited half of that (after taxes) a few years ago. I had been wanting to move to a bigger place, so used $100K as a downpayment to avoid selling my condo, which I bought almost 15 years ago and am currently using as a profitable investment property. I put the maximum lump sum allowed ($65K at the time) into my DD's 529. I used $5K for a great vacation for the two of us, and invested the rest. It has grown nicely, and as a solo parent it's a great comfort to have that in addition to my job. If I don't ever need it to support us, it will be used in retirement (and to supplement college savings) but if I do, it's there.

PP from above - I should add that I had no consumer debt or student loans, and already had an emergency fund. I would have handled all those things first otherwise.

I inherited half of that (after taxes) a few years ago. I had been wanting to move to a bigger place, so used $100K as a downpayment to avoid selling my condo, which I bought almost 15 years ago and am currently using as a profitable investment property. I put the maximum lump sum allowed ($65K at the time) into my DD's 529. I used $5K for a great vacation for the two of us, and invested the rest. It has grown nicely, and as a solo parent it's a great comfort to have that in addition to my job. If I don't ever need it to support us, it will be used in retirement (and to supplement college savings) but if I do, it's there.