re: Received an inheritance now how to plan for future retirement?

1)what is your mortgage interest rate? if it is low (sub 4%), then don't necessarily use your cash to pay it off now. You can potentially earn more w/the liquid cash than the loan is costing you...as mortgage interest is deductible. If the loan IS higher interest, consider using a little of the cash to get into a lower interest loan. Rates are still very low. Use someone else's cheap money and keep your cash for investing. Go to bankrate.com and look at the mortgage calculators: put in all of your current variables (loan balance, rate, etc) and look at the detailed amortization schedule. It will show you exactly how much interest you are paying over time. Re-run the calculator using today's mortgage rates and compare the two. You can see how much you'd save in interest with a re-fi and how much the loan is costing you. It might not be as much as you think.

2)ditto for the car loan. Look at the interest rate...if it is .9% or other ridiculously low rate, then keep your cash and pay the loan off over time. Is the vehicle worth more than the loan balance? This might be a good time to sell it and get another vehicle financed at a super-low rate. I bought a new car on a .9% rate; it will cost me a couple hundred bucks in interest to pay it off over 36 months. I'd much rather have that chunk of cash in my pocket, working for me, and spend the lousy few hundy in interest rather than paying off the car.

3)start an individual retirement account. Since you have NO retirement funds, I'd start with a traditional IRA. The traditional IRA is deductible on your income taxes (up to $5,500 depending on your adjusted gross income). The IRA contribution deduction can be claimed whether or not you itemize. Right now, you can still make an IRA contribution for 2014 (up until April 15). So right now, you can open an IRA and fund it with up to $5,500 for 2014 and $5,500 for '15. In one fell swoop, you can dump $11,000 into retirement. You may be able to put more away, depending on your employment status (since you're not covered by an employer plan) and income.

Pick a low-cost provider, put everything into a life-cycle portfolio (this is a mix of funds selected for your age). Or, if that's still too much risk, go for an index fund. You've got years to let it ride, so don't be too conservative. CD rates are worse than awful right now...given that you're not going to need the retirement money any time soon, I'd accept a little risk.

4)start an emergency cash reserve of 6-12 months living expenses. stick it in an online only bank account so you aren't tempted to chip away at it. you won't make much money on it, but that's not the point. it is your ready cash cushion.

If you still have a pile of cash left over, go back to #1. It MIGHT be a good idea to pay off the car or house after you've fully funded retirement for this year & last and piled up a cash reserve.