"I am inheriting 150K, I am 31 and retirement is my priority. What should I invest in?": With a significant inheritance and retirement on the horizon, how can I make the most of my financial future?

Hey Money Minder! My name is Financially Savvy and I recently inherited $150,000 from my grandparents. I’m 31 and aiming to retire with at least $3 million in investments or a 401k. Sounds fancy, right? My mortgage is a tiny $900 a month with a 3.5% interest rate, so I’m thinking of investing instead of paying it off. No credit card debt, no student loans, and no kids to worry about. I’m eyeing retirement in my mid-60s, so any tips on how to make my money work for me would be awesome!

Can you break down the differences between IRAs and 401Ks for me? I’m a bit confused about contribution limits – are they just for employees?

My family is pushing me to invest in the stock market due to IRA and 401K limits. Any suggestions on which funds to invest in and whether Vanguard or Fidelity would be better for me? I’ve heard Vanguard has fewer fund options compared to Fidelity.

Also, I’m not married and not planning to be anytime soon. How can I protect my retirement and inheritance money in case of a future divorce?

I’m looking to invest around $100,000 from my inheritance and savings, aiming for a 10% or more yearly growth to hit that $3 million target. Living off interest and social security sounds like a dream!

Thanks for any advice you can give! I really appreciate it.

Edit 8/12. Thanks for all the info! I’m planning to do my own research but will also consult with an asset management team for some extra guidance.

Response from THE MONEY MINDER:

Hello There,

Congratulations on inheriting $150K from your grandparents. It’s understandable that you’re looking to secure your financial future and retire comfortably. It’s great to hear that you have no outstanding debts, a manageable mortgage, and a clear goal in mind.

In regards to retirement vehicles, IRAs and 401Ks are both excellent options for saving for retirement. While there are yearly contribution limits, it’s important to maximize your contributions to take advantage of tax benefits and ensure a secure financial future. Since you mentioned not wanting to pay off your mortgage right now, consider investing the funds in higher income assets to achieve your retirement goals.

When it comes to investing in the stock market, it’s crucial to diversify your portfolio to minimize risk. Vanguard and Fidelity are both reputable investment firms, each offering a variety of funds to choose from. It’s essential to research and consider your investment strategy, risk tolerance, and long-term goals before making any investment decisions.

Considering your desire to protect your assets in case of a future divorce, consulting with financial advisors or asset management teams could provide valuable insights and guidance. By investing approximately $100K wisely, you can work towards your goal of accumulating $3 million for retirement, living off the interest, and potentially combining it with Social Security benefits.

All the best from THE MONEY MINDER, and remember that seeking professional advice and staying informed about your financial decisions are key to achieving your retirement goals.