My dad died unexpectedly four months ago, not long before his planned retirement. My mom died when I was young; all of his assets are passing to me.
$250,000 life insurance (no tax implications)
$350,000 retirement accounts (RMDs starting next year; taxable as income)
est. $300,000 cash from estate (after house is sold and all debts paid)
My only debt is a $205k mortgage (4.15% interest rate) on a condo worth 260k. I make $60k/yr. I'm 31 years old; I had $60k saved for retirement previously, and a roughly $30k emergency fund.
I'm still struggling to process all of this, mostly because it's way more money than I've ever dealt with or expected to receive. I feel guilty about being handed a big chunk of money that my dad worked hard to save for himself. I feel that I don't deserve it in any real sense. I'm also worried about mismanaging it.
My first instinct is to use the life insurance payout to eliminate my mortgage entirely. This seems like a simple step, and lets me use (or invest) more of the money that I've actually earned. That appeals to me on an emotional level.
On the other hand, the advisor who I spoke to while accepting the retirement accounts tried to convince me to put all of the cash into an actively-managed taxable account (with 1% fees), maintain my current lifestyle / budget, and let the money grow into some ridiculous number over many years. Details aside, I guess the overall strategy there is more strictly rational, since the market will likely outperform 4.15% over time.
I understand that actively-managed accounts have a very bad reputation here. Still, given the amount of cash I'm looking at, I feel like I will need some sort of a taxable investment account no matter what, and I'm not sure I feel comfortable handling that 100% myself.
I have two main questions, I guess:
-Would I be crazy to pay off this mortgage immediately instead of investing the 205k?
-How do I find a neutral financial advisor? I'm willing to accept professional help, but I felt like the "fiduciary" from the retirement company was mainly interested in selling me on his company's product.
Submitted October 18, 2019 at 07:39PM by inherithrowawy https://ift.tt/31tgJj9
