Debt Free Or Invest 100k

Math may say one thing, but I think it's never wrong to pay off debt

I paid off my mortgage and eliminated all my debts a few years back. Sure; I may have missed out on some potential returns; but, the psychological benefit of knowing you are beholden to nobody is immeasurable.

How much do you value the peace of mind knowing you're debt free?

Either is probably fine but something to consider is with less debt, you gain more freedom of salary in your search for a new job. You might find something you are very interested in but feel you have to pass it up because the monthly bills stretch the budget too thin.

I personally think everyone has a value to lower stress and financial freedom. You just have to take time to calculate that value for yourself. Many on this board dont believe in such things so you'll always get the "invest it" recommendations because math says so (incorrect math that is).

First, I'd keep a large cash position on hand until career transition is complete and stable/predictable.

I wouldn't accelerate debt repayment on anything below ~6%. I regret paying off my first mortgage years ago at 5.5% missing years of market growth.

You can't contribute $100k to an IRA all in one year. Perhaps use the $ to free up cash flow so you can max employer plans (if hers and/or your new job offers one) for you and wife and Roth or traditional IRAs. Excess could be invested in taxable brokerage instead of retirement.

Is their "gift" considered compensation and taxed as such? If so, make sure to set taxes aside. If it's actually being characterized as a gift, I'd seek tax advice to be sure you aren't subject to income tax and FICA.

Roughly 90k between house, 1 vehicle and a new boat (purchased last year) note. Boat being the highest interest and makes up majority of debt.

Would paying off those bills then taking money that was allocated to those notes and investing in some sort of IRA make sense? I have it in my head that being debt free and not owing anyone money is the correct way to go but also worried about my retirement which is almost nonexistent as of now.

It doesn't have to be all or nothing; Spend most of it on the boat and invest the rest.

Do you know then the interest rates off the top of your head?

You won't like this but if I had "almost nonexistent" retirement, I would sell the boat and throw the payment, insurance and running costs into investments. The time for toys is over until you catch up on responsible adulting. Good on you for taking first step asking for advice.

You could start by simply following this Financial Order of Operations from TheMoneyGuy

Also, read J.L. Collins' Simple Path to Wealth before blindly "investing in some sort of IRA" without knowing what you're getting into.

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Now back to subject, debt free or invest?

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As people have said, your rates on your loans matter. Without knowing those details it is hard to say.

To be very generic though

A $100,000 with 10% yearly growth will be $259,374 in 10 years.

To pay off a $90,000 loan with a 10% interest rate over 10 years would $142,052 total. $1,183.77 a month payment.

Investing would net you a potential $159,000, but you would be paying interest on the debt so in the end a little over $100,000.

If you paid off debt and turn the debt payment into investing $1,183.77 monthly for 10 years at an average return of 10%, you’d have approximately $245,605.92.