My father passed away suddenly in a tragic accident last weekend. It has been a tough week for my family and I, but my dad was thinking of my siblings and I should something happen to him. Consequently, we inherited some money from life insurance and 401k.
I (30 y/o) will be receiving $137.5K from life insurance, $50K from his 401k (transferring to an inherited IRA), and an additional $20K from AD&D. There may be more money after probate, but nothing significant (maybe $10K after settling his significant credit card debt).
Total Inheritance: $207.5K (but maybe a little more)
Current Financial Situation
Assets:
– $195K in 401k and IRAs (mostly pre-tax)
– $600K primary residence
– $215K cash (checking and high-yield savings)
– $5K taxable account (VOO)
– 2025 BMW worth $60K
Debt:
– $14.5K student loans at 2.5%
– $411k mortgage at 4.125%
Income:
– Salary is $250K
I know I am already keeping more cash on hand than I should, but my initial thought is to add the inheritance to my savings. Of course, the inherited IRA will be invested in VOO. (or maybe a mix, I am a bit nervous of the S&P 500 right now)
In general, I am very worried about job security (work in tech) and the economy. I truly believe we are in an AI bubble, but who knows. I personally have cut back on spending and will continue to do so throughout 2026.
What would you do?
Inherited some money after my father passed suddenly. Now what?
byu/techbrandon inpersonalfinance
Posted by techbrandon
4 Comments
Immediately pay off those student loans , don’t play, mortgage you should plan out tho.
If you admit you already have too much cash on hand, why would you just add more cash to your savings? It sounds like you’re trying to time the market. Invest it and forget it.
Everyone saying they’re worried about buying the S&P because it’s at all-time-highs has lost out on more than 10% growth over the last 6 months.
I’m sorry for your loss. That’s awful. Those loans are so low – I think you’re fine to put more of that into your HYSA, max sure you max out your retirement accounts for 2025/2026 and also put some more cash into your brokerage (VOO, VTI, VXUS – whatever simple strategy is fine if you’re not touching the cash for the long term). Remember you also want this cash to beat inflation but that’s also about risk tolerance
Really sorry to hear about your loss.
I personally would put almost all of it into a Treasury ETF for at least a few months so I don’t make decisions while still reeling from the loss. You can let the money tread water for a bit while you process grief and focus on family and just keeping your feet under you.
A couple things to consider that might benefit from an earlier decision than a later one but still don’t need to be made immediately:
* If mega backdoor Roth is an option in your 401k and you aren’t already using up that space, now is the time. The way to do that is to increase your contribution rate, and then use the liquid funds to make up for the lower take home pay.
* You didn’t mention HSA and may not have access to one, but if you do, max it if you aren’t already
* Make sure you made your full 2025 contribution via backdoor Roth or else use it up before tax day.
Longer term, I wouldn’t pay early on either of those debts and would instead invest it all since you already have plenty of cash reserves (maybe too much, unless you’re saving for something on top of a 12-month emergency fund). My strategy is just VTI + VXUS, so that’s what I would do regardless of where the money comes from. I also work in tech and think we’re in an AI bubble, but I think my time horizon on investments is long enough that it will work out eventually as the industry adjusts and pivots to other advancements.