I stand to inherit about $150k some time this year. I am 60 years old, divorced, retired and own my home outright. It currently is valued at approx. $500k. I owe about $3k on my car loan. I have credit card debt of less than $500 which I'm doing to improve my credit rating after nasty divorce. Monthly expenses are average; utilities, yard, etc. I'm not much of a spender so saving isn't a problem for me. I have passive income of approx. $4,800. This has only been for about 1 year so I haven't had a ton of time to save on my own, post divorce.

In any event, I'd like to be smart with the upcoming inheritance. I'm contemplating going back to work, even part-time (contract paralegal). I'd really like for this small amount of money to work for me but not sure how to go about that. Any thoughts?

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    Questions soliciting opinions are off-topic here. If you have questions about specific investment/saving options after doing some research those would likely be on-topic. Good on you for looking into how to make wise use of the money. Are you carrying a balance on your credit card and paying interest? If so, that's not helpful for your credit score, just utilize your credit card lightly and pay off the statement balance each month.
    – Hart CO
    Feb 12 at 20:58
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    Do you have any retirement assets, such as pension accounts? What jurisdiction are you in? Are healthcare costs a concern where you are? Have you maxed your government pension? If you downsized your house, how much would it cost to buy an adequate property for you to live in retirement? $150k isn't a lot to live on for retirement, but with your other assets and especially with an ongoing income if you return to work, you seem to be a good position. Feb 12 at 21:42
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    This duplicates some past questions about what to do with a sudden influx of money. The answer is much the same: consider when you expect to use money, and manage your overall financial position to trade off risk, reward, and access appropriately, rather than doing something specifically with this chunk of change that differs from your other long-term plans.
    – keshlam
    Feb 12 at 22:50
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    Pay off any high interest debt. Park the money in short term 5+ pct treasuries and/or CDs until you know what you want to do with it. Feb 13 at 0:58
  • Agree that paying off high-interest debt is usually the first priority, if you have any.
    – keshlam
    Feb 13 at 16:41

1 Answer 1


Oddly, 150K is a lot of money and also not a lot of money. It is truly a blessing to receive it, but not much if you were dependent upon it to provide income for your remaining years.

You mentioned that you have 4.8K/month in passive income. What will happen to that in the future? Is it likely to increase, decrease or remain the same? How does that do in meeting your current financial needs?

The easiest and most risk free way to make this money work for you is to buy an annuity. I hate annuities as the insurance companies get to keep your money after you die. This is terrible for your heirs, but for some that is not a concern as they have no heirs. When you purchase an annuity they will pay about 6% in income, so in this case about $750 a month. However, once you figure in that they keep the money, the real rate of return is less than 2%. It is very easy to beat 2% for the sake of your heirs.

For a person that is not super investment savvy, has an interest in leaving an inheritance, and would like this money to provide income I would recommend a mutual fund that is focused on dividends. Some are low risk but high yield, like DGRO (2.37%, $296/mo), others are higher risk but much higher yield: QYLD (11.5%, $1,437/mo) or XYLD (10.9%, $1362/mo).

There are many options so please do your own research or consider consulting with a fee only financial adviser.

Personally I like the idea of QYLD that uses covered calls to generate income. Having used this strategy, myself, to generate crazy returns this could be very lucrative. While the increase in share price is limited, for people seeking income this could be a great fund.

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