From Kiplinger · · 1m 50s
What to Do With a $100,000 Inheritance
How to use a $100,000 inheritance without losing it.
In brief
How to use a $100,000 inheritance without losing it. A $100,000 inheritance can boost retirement savings, pay off debt, or build an emergency fund without disappearing in the first year. Originally reported by Kiplinger.
Inheritance feelings
Receiving a financial windfall can trigger guilt and sadness after losing a loved one.
Inheritance risk
42% of heirs spent their entire inheritance within one year according to the U.S. Health and Retirement Study.
Parent-child expectations
42% of younger respondents say they don't expect to receive a sizable inheritance.
Parent plans
About twice as many parents plan to leave a meaningful inheritance than younger respondents expect.
Take time to breathe
Don't rush to make inheritance decisions; give yourself permission to do nothing for a while.
Don't treat a promise like a payday
Wait until you know what you have before making plans for how to spend it.
Focus on debt reduction
Paying off high-interest debt is the most valuable first move with an inheritance.
Consider investing
Diversify investments across different options with varying risk levels over time.
Boost retirement contributions
Put $24,500 in a 401(k) or $7,500 in an IRA to boost retirement savings.
Understand tax implications
Inherited securities need cost basis tracking and tax rules vary for traditional vs. Roth IRAs.
Enjoy your inheritance
Use part of the inheritance for experiences or debt payoff without losing it all.
Real-world example
A client used $150,000 inheritance for Europe travel, student loans, and investments.
What it means
An inheritance can honor both immediate enjoyment and long-term financial security.
The consequence
Good planning ensures the inheritance lasts without disappearing in the first year.
What it means
A $100,000 inheritance can boost retirement savings, pay off debt, or build an emergency fund without disappearing in the first year.
