What to Do With a $150K Inheritance
A $150,000 inheritance is life-changing money. Here's how to protect and grow it wisely.
Key Takeaways
- 1Take 60-90 days before making any major financial decisions.
- 2At $150k, consider consulting a fee-only financial advisor.
- 3Diversify across multiple asset classes and account types.
- 4A Gold IRA allocation (10-15%) provides crucial protection.
- 5Don't tell extended family or friends about the exact amount.
Initial Steps: The 90-Day Rule
With $150k, you have the luxury of time. Use it wisely.
- Park funds in Treasury bills or high-yield savings (earning 4-5%)
- Wait 60-90 days before making investment decisions
- Use this time to research and interview advisors
- Continue living your normal life - no major purchases
- Grieve and process the loss before focusing on money
- Keep the amount private from extended network
Tax Considerations
Understanding the tax treatment of your inheritance:
- **Inherited IRA:** Must distribute within 10 years (SECURE Act)
- **Stepped-up basis:** You only pay gains on appreciation AFTER inheritance
- **State taxes:** 6 states have inheritance tax - check yours
| Inheritance Type | Tax Treatment |
|---|---|
| Cash inheritance | Generally not taxable |
| Inherited IRA/401k | Distributions are taxable income |
| Inherited stocks | "Stepped-up" basis at date of death |
| Inherited real estate | Stepped-up basis; capital gains only on appreciation after |
| Estate tax | Only if estate exceeded $13.61M (2024) |
Diversification Strategy
At $150k, diversification becomes crucial. Don't put all eggs in one basket.
- **Asset classes:** Stocks, bonds, real assets (gold), cash
- **Account types:** Taxable, tax-deferred (IRA), tax-free (Roth)
- **Geography:** US and international exposure
- **Time horizons:** Short-term liquidity + long-term growth
- **Risk levels:** Conservative core + growth satellite
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When to Get Professional Help
At $150k, professional advice can pay for itself:
- Look for "fee-only" AND "fiduciary" credentials
- Avoid commission-based salespeople
- NAPFA.org lists fee-only advisors
- Interview at least 3 before choosing
| Professional | Role | Cost |
|---|---|---|
| Fee-only advisor | Financial planning | $1,500-3,000 one-time |
| CPA | Tax strategy | $300-800/year |
| Estate attorney | Will/trust setup | $1,000-2,500 |
Suggested $150K Allocation Plan
Here's a balanced approach for long-term wealth building:
- Adjust based on age, risk tolerance, and existing assets
- The Gold IRA provides protection paper assets cannot
- Discretionary fund lets you enjoy something meaningful
| Category | Amount | Percentage |
|---|---|---|
| Emergency fund | $15,000-25,000 | 10-17% |
| Pay off high-interest debt | Variable | As needed |
| Gold IRA | $15,000-22,500 | 10-15% |
| US stock index funds | $45,000-60,000 | 30-40% |
| Bond funds | $22,500-30,000 | 15-20% |
| International stocks | $15,000-22,500 | 10-15% |
| Discretionary | $7,500-10,000 | 5-7% |
Beware of "Opportunities"
After receiving an inheritance, you may encounter people with "great investment opportunities." Real estate deals, business ventures, cryptocurrency schemes. Be extremely skeptical. If it sounds too good to be true, it is.
Protect Your $150K Legacy With Physical Gold
This inheritance is a one-time gift. Protect a meaningful portion from forces you cannot control.
- Allocate $15,000-$22,500 (10-15%) to a Gold IRA
- Physical gold holds value when markets crash
- Protection against inflation eroding your inheritance
- No counterparty risk - you own the actual metal
- Same tax advantages as traditional retirement accounts
Frequently Asked Questions
1Should I pay off my mortgage with a $150k inheritance?
It depends on your interest rate and emotional preference. If your mortgage is under 4%, investing may generate higher returns. If it's above 6%, paying it off is a solid "guaranteed return." Many people value the peace of mind of being debt-free over optimal mathematical returns.
2How much should I give to family members?
First, ensure your own financial security. You can gift up to $18,000 per person per year without gift tax implications. But don't give away money you might need later - you can't ask for it back. Consider your retirement needs first.
3Is $150k enough to retire early?
By itself, probably not. Using the 4% rule, $150k generates about $6,000/year. However, combined with Social Security and other savings, it could allow you to retire 2-5 years earlier than planned or take a less stressful job.
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