Handling a Large Sum of Money

For most of our lives, money comes in regularly over time from paychecks or Social Security. Sometimes a large amount of money is given to us from a pension, inheritance, sale of a property or from a life insurance policy when someone (spouse, other) dies.

One mistake to avoid is rushing to a decision on what to do with the money. You don’t have to hurry to decide what to do. It’s not a scratchoff lottery ticket. Quick choices can lead to regret. I have helped with over 400 settlements and inheritances. A majority of people spent the money in 90 days on vacation homes, cruises, expensive cars, motor homes, boats, etc.

My advice is to slow down. Place the money in a safe investment to give yourself time to sort your thoughts. Emotional decisions based on your feelings might not be the best plan.

Consider meeting with a professional retirement planner who does more coaching than investing. You’ll have a discussion about debt, taxes, planned purchases, income needs, children and grandchildren, long term care concerns, etc.

What to do with what you have will give you peace of mind if you create a good comprehensive plan.

An inheritance can help you retire soon, pay taxes on IRA to tax-free Roth IRA Conversions, take your family on a memorable vacation, help pay off your children’s college loans, put money away in 529 plans for your grandchildren and pay off debt – but not if you spend it quickly.

Last, be prepared to say no to those who “come out of the woodwork” when they find out you have money.

Need assistance? Seek an expert or call Lifeguard Financial.