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In the next 20 years, Americans will inherit an estimated $72 trillion as boomers pass down their accumulated wealth to younger generations in a phenomenon dubbed the Great Wealth Transfer.
That means there will be a lot of people like you who are surprised — even if pleasantly so — to be inheriting money and unsure about how best to manage it.
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This problem stems from a lack of communication around estate planning. A 2024 Edward Jones report found that more than one in three Americans have no plans to talk about their estate with their families, even though 48% plan to leave an inheritance.
You were unprepared for this windfall, but it’s good to be thoughtful about how you’re going to manage the money going forward so you don’t waste this opportunity to improve your life now and in the future.
Here are some options to explore.
Invest in your retirement
If you’ve inherited a large sum of money, one thing you could do is to put it into an investment portfolio that’s earmarked for retirement.
A 2024 CNBC survey found that 40% of Americans are behind on retirement planning and savings, while 21% of current retirees have no savings at all to live on.
You don’t want to rely on Social Security in retirement, because those benefits only replace 40% of your paycheck if you’re an average earner. Plus there’s a possibility of Social Security cuts in the not-so-distant future.
Investing your inheritance now could give you greater retirement security, and help you build a legacy for future generations.
It’s important to maintain a diverse mix of assets in your portfolio. If you’re years away from retirement, you might keep the bulk of your portfolio in stocks and a smaller portion in bonds.
For instant diversification, consider investing in S&P 500 index funds, giving you exposure to the 500 largest publicly traded companies. For the bond portion of your portfolio, consider a mix of corporate bonds, Treasuries, and municipal bonds for tax diversification.
However, diversifying outside of the stock market is equally critical, especially given its recent volatility. Investing in commodities like gold can help stabilize your portfolio and ensure your retirement fund continues to grow.
When you open a gold IRA with Priority Gold, you can roll over existing 401(k) or IRA accounts into a precious metals IRA without tax-related penalties. Qualifying purchases can also receive up to $10,000 in free silver.
Learn more about why Priority Gold has 5-star reviews on Trustpilot and the Better Business Bureau when you download their free 2025 guide on investing in precious metals.
Another way to diversify is to invest in real estate. New investing platforms are making it easier than ever to tap into this market.
For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.
With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
With risk-adjusted internal returns ranging from 14% to 17%, this approach provides an effective, hands-off way to invest in owner-occupied residential properties across regional markets.
If you’re not an accredited investor, crowdfunding platforms like Arrived allow you to enter the real estate market for as little as $100.
Arrived offers you access to shares of SEC-qualified investments in rental homes and vacation rentals, curated and vetted for their appreciation and income potential.
Backed by world-class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio regardless of your income level. Their flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part.
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Address your family’s most pressing needs
There’s nothing wrong with using proceeds from an inheritance to improve your life and that of your family — right now. So think about your most pressing needs.
If you’re living in cramped quarters, you might use some of your money to finish off your home’s basement for extra living space. Or you could buy a larger home.
Mortgage Research Center (MRC) can help you get started on the buying process in less time than you’d think. Their online platform allows you to quickly compare rates and estimated monthly payments from multiple vetted lenders. All you have to do is enter some basic information about yourself, such as your zip code, your desired property type and price range and annual income.
Based on the information you provide, MRC will show you mortgage offers tailored to your needs so you can shop for a mortgage with confidence.
After you match with a desired lender, you can set up a free, no-obligation consultation to see if you’ve found the right fit. You can also invest in your children’s education. A December 2023 Discover survey found that 70% of parents are worried about not having enough funds to cover their children’s education.
You could put some of your inheritance into a 529 plan toward your children’s college education, allowing it to grow tax-free.
Consult a financial advisor
Whenever your financial situation changes substantively, it’s a good idea to consult a professional. A financial advisor can guide you through some of the best ways to invest your inheritance to meet your goals — and advise you on tax and legal implications.
For example, income from certain assets could bump you into a higher tax bracket. An inherited IRA might be subject to the 10-year rule, meaning you have to withdraw all the funds within 10 years of the original account owner’s death.
You can learn more about the unique rules and opportunities your new financial situation will entail with a professional advisor found on Advisor.com.
This online platform connects you with vetted financial advisors best suited to help you develop a plan for your new wealth.
Just answer a few quick questions about yourself and your finances and the platform will match you with an experienced financial professional. You can view their profile, read past client reviews, and schedule an initial consultation for free with no obligation to hire.
With that kind of guidance, your surprise inheritance might additionally surprise you in all the ways it can multiply abundance in your life.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
