Question

Hi LMM Community.  I'm inheriting a large sum from my father.Hi LMM Community. I'm inheriting a large sum from my father. I'm 48 without much savings/investments at all (I'm afraid to admit). It's not all terrible, I do have a military pension and its insanely cheap health insurance. This inheritance is a blessing and I want to use it to get me where I should be. looking to retire in 10 years. The estate should close by the end of the year. How should I invest my inheritance today to retire in 10 years? I believe/agree with LMM that financial advisors are travel agents of year's past. I'm leaning towards jumping into Vanguard Index Funds right away. 30% bonds, 70% funds

Answer 1

Thanks for your service. I’m retired military as well. Almost all of our investments are exactly as you’re planning. low cost index funds. Boring, steady, and proven. If you’re coming into a large chunk maybe consider phasing your purchases of investments overtime to avoid some weird market timing with volatility. but I’d imagine you’d have good results 10 yrs from now, and beyond. - sorry for the loss of your dad too. My 2 cents.  

Comments

Oh, and literally, all you’d have to do is recheck your allocation once in a while to maintain your 30/70 split. like once a year, just look and see if you need to rebalance, if say, stocks had a big run and started taking over a bigger portion than you desired. It doesn’t have to be any more complicated than that.  

---

Do some research on the bucket strategy, and realize your pension is a bond proxy

Answer 2

Do you own a home? If not I would look into taking advantage of the incredibly low mortgages with some of your inheritance

Answer 3

Thanks for your service and agree take it easy and handle family first. When time to work on finances, I would say I’m sure there is Tax Implications so meeting with your normal accountant first might make sense to build a plan. Next, Vanguard index funds is 100% the right call. Go from higher in stocks vs bonds and overtime move to more bonds vs. stocks when you actually need the money. But check out the 4% rule depending on inheritance. Bonds are terrible performance right now. Warren Buffet says can’t beat stocks right now. Bonds are too poor of performance right now. Good luck, don’t blow the cash!  

Answer 4

The LMM podcast about the "Golden Butterfly" would probably be of interest to you, as well.