I stand to receive 500k from a family member through inheritance.
I currently have 26 years left on my mortgage (owe 325k, 4.1 interest rate)
I want to fund my 529 plan for college for my one year child (2000 current balance).
My wife and I both have a great pension when we retire that will set us up for retirement already.
Should I pay off my mortgage?
Or just I put all that money into VOO and forgot it? Or maybe something safer like SCHD?
Thank for any advice.
What to do with inheritance?
byu/Dependent-Capital463 inpersonalfinance
Posted by Dependent-Capital463
3 Comments
At 4.1%, I wouldn’t rush to pay off the mortgage, long-term investing will likely outperform it. A simple play is putting most into VOO (or SCHD if you want more stability) and boosting the 529 early. You can also split it, no need to go all in one direction.
4.1% is really low, especially if you have no problems paying your bills at the moment and could make more then that in the market. Imho
4.1% mortgage rate is cheap money. VOO historically returns 10%+ annually. mathematically you come out ahead investing over paying off the mortgage.
but math isn’t everything. some people sleep better with no mortgage. only you know which camp you’re in.
practical split worth considering:
keep the mortgage, throw 400k into VOO, fund the 529 properly, keep 50-100k liquid for emergencies and life.
with pensions already covering retirement you don’t need to be aggressive or complex. boring and consistent wins here.
what does your wife think about the mortgage question? that conversation matters more than the math.