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Started By
Message
Where should I put "found money" from an inherited 401K?
Posted on 5/11/23 at 8:40 am
Posted on 5/11/23 at 8:40 am
Backstory:
My mom passed away last year. I'm the executor. She had some money/assets stashed away, so I've been working through closing stuff out and 50/50ing things with my sister.
We found out she had an 401K (that we weren't tracking). My portion is <$50K.
Where should I put this money? I'm in my mid-40s, all of my / our retirement planning is in good shape. I don't need the cash, and don't have consequential debt.
In the most ideal of worlds, I would like to use this as seed money for another retirement account that I squirrel some money away into each month to help it grow.
Any suggestions?
My mom passed away last year. I'm the executor. She had some money/assets stashed away, so I've been working through closing stuff out and 50/50ing things with my sister.
We found out she had an 401K (that we weren't tracking). My portion is <$50K.
Where should I put this money? I'm in my mid-40s, all of my / our retirement planning is in good shape. I don't need the cash, and don't have consequential debt.
In the most ideal of worlds, I would like to use this as seed money for another retirement account that I squirrel some money away into each month to help it grow.
Any suggestions?
5
Posted on 5/11/23 at 8:41 am to Sheep
SPY
Posted on 5/11/23 at 8:45 am to MrJimBeam
Crank up a Vanguard account and then set it and forget it?
This post was edited on 5/11/23 at 8:46 am
Posted on 5/11/23 at 8:46 am to Sheep
Was mom receiving RMDs from that account while she was still alive?
You are going to need to take the entire value into income within 10 years following her passing, and also, will have to take a certain amount each year if she was already taking RMDs.
As you take it into income, you can always stick it in a taxable investment account. I'll let others share their thoughts on how it should be invested.
You are going to need to take the entire value into income within 10 years following her passing, and also, will have to take a certain amount each year if she was already taking RMDs.
As you take it into income, you can always stick it in a taxable investment account. I'll let others share their thoughts on how it should be invested.
Posted on 5/11/23 at 9:03 am to Sheep
My serious answer that many will downvote because they will dismiss it as pedantic is this:
Buy 100-500 shares of AAPL, MSFT, QQQ, SPY or you name the blue chip.
Then "wheel it" for steady income.
If you own 100+ shares then sell weekly Covered Calls at a 15 delta to earn weekly income.
If you have the cash and do not own the stock then sell Cash Secured Puts to earn weekly income.
This can become a fun hobby and if you currently have no knowledge on the subject, you can learn all you need to know in a few weeks with some practice.
blue collar investor
Tasty Live
Or google some videos for tutorials.
Buy 100-500 shares of AAPL, MSFT, QQQ, SPY or you name the blue chip.
Then "wheel it" for steady income.
If you own 100+ shares then sell weekly Covered Calls at a 15 delta to earn weekly income.
If you have the cash and do not own the stock then sell Cash Secured Puts to earn weekly income.
This can become a fun hobby and if you currently have no knowledge on the subject, you can learn all you need to know in a few weeks with some practice.
blue collar investor
Tasty Live
Or google some videos for tutorials.
This post was edited on 5/11/23 at 9:38 am
Posted on 5/11/23 at 9:11 am to bayoubengals88
Especially since he said he didn’t need the money for debt reduction or other pressing needs… 
Posted on 5/11/23 at 9:11 am to LSUFanHouston
Thanks.
She was taking RMDs.
I don't mind taking the distribution today, just want to select the correct vehicle for investment. (What funds specifically is less critical, I'm comfortable navigating the funds - NOT interested in day-to-day trading.)
She was taking RMDs.
I don't mind taking the distribution today, just want to select the correct vehicle for investment. (What funds specifically is less critical, I'm comfortable navigating the funds - NOT interested in day-to-day trading.)
Posted on 5/11/23 at 10:05 am to Sheep
Take $10K and spend on a family trip. Think of it as a last gift from your mom and frame it as such with the rest of your family. VSTAX and relax the rest
Posted on 5/11/23 at 10:28 am to Sheep
quote:
just want to select the correct vehicle for investment
Depending on your tax situation, probably best to keep it in tax differed inherited 401k as long as possible. Lump sum withdrawal might result in higher taxes of a portion of withdrawal if it goes into next tax bracket. If youre not already maxing all retirement accounts use the withdrawals to free up cashflow to increase your retirement contributions. If you're already maxing retirement accounts just use taxable brokerage.
Posted on 5/11/23 at 11:10 am to TorchtheFlyingTiger
quote:
Lump sum withdrawal might result in higher taxes of a portion of withdrawal if it goes into next tax bracket
Good call - I need to check this, I think we were borderline this year.
Posted on 5/11/23 at 2:09 pm to Sheep
It’s found money - put it all on black at the casino
Posted on 5/11/23 at 2:15 pm to Sheep
quote:
Good call - I need to check this, I think we were borderline this year.
If you are going from 22 to 24, most don't care.
But if you are going from 12 to 22 or 24 to 32, yeah, that can be important. Spread it out.
Posted on 5/11/23 at 2:18 pm to LSUFanHouston
quote:
If you are going from 22 to 24, most don't care.
But if you are going from 12 to 22 or 24 to 32, yeah, that can be important. Spread it out.
We were borderline two years ago, past it now. (This is why I don't want to do day-to-day trading, I just don't pay attention that closely.)
Posted on 5/11/23 at 2:20 pm to Upperdecker
quote:
It’s found money - put it all on black at the casino
Plan C is dump it all in my FanDuel account and put it into 8 leg parlays, one dollar at a time.
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