My wife and I are in our 50s. We lost our house in 2008, declared bankruptcy and finally bought another home. We will inherit $200K. How should we invest it?

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We will inherit $200K. Moneyist, should I pay off my home ($82,000 left on the mortgage) and invest the balance for retirement ($40,000 in our 401(k)), or invest the entire amount and try to refinance my home?

My wife and I have struggled for years financially. She is disabled, and I’m the main source of income for our family. I’m 59 years old, and my wife is 58 years old.

As we had a private mortgage, we did not include our home in the bankruptcy and continued to make our payment. We have no other debt and have an annual household income of $98,500. I’ve been in my current job for six years and plan to retire here . After the estate settles, we anticipate receiving about $200,000 each. My uncle worked, saved and lived a frugal lifestyle for many years, and I want to honor this gift and use it wisely.

A cautionary note for others: Your inheritance could have been at risk had you received it earlier. “The general consensus among the courts is that monies received by a debtor from a POD account during the 180 days following a bankruptcy filing are not to be considered property of the estate,” according to Foster Swift.

Do you have health insurance through your employer? Is a high-deductible plan with a Health Savings Account an option? “If so, you can set aside $7,300 plus an additional $1,000 catch-up contribution for 2022 that will grow and can be used tax-free for future healthcare expenses,” McBride adds. Leonard C. Wright, a CFP and current chair of the American Institute of Certified Public Accountants, also recommends the benefits of aggressively saving in your company 401 plan. “If the investments you have appreciated at 7% per year over the next 10 years, the $120,000 plus $40,000 may grow to $320,000.”

 

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Pay off the debt. Invest the rest.

inflate away that debt.

Just invest it. Unless your mortgage rate is crazy high, the spread between the returns and the mortgage rate

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