Personal Finance

I had $600k saved for retirement in my late 20s and I just found out I inherited $5 million - what's my next move?

David Beren

Published: January 12, 2025 11:05 am

One of the best things that can happen to anyone is that you establish good money habits to start saving for retirement. Arguably, the most important thing is that you can put enough away to enjoy your retirement without worrying about anything financially related. 

In the case of one Redditor who posted in r/fatFIRE, they had already established good money habits on their way to FIRE. With a $600,000 net worth at 26 years old, they were already showing great financial discipline only to find out they were receiving a $5 million inheritance, which now begs the question of what to do next. 

This scenario proves that good money habits can be instilled in individuals looking to set themselves up for the rest of their lives, even at a young age. 

Good Financial Habits

This windfall is unsurprisingly life-changing for our 26-year-old Redditor earning $70,000 in a professionally licensed field with income expected to rise over time. The initial goal was to retire at around 40, but now, with $5.6 million set aside, there is a question about what to do next, whether it’s retirement or to keep going. 

Better yet, this Redditor is asking the right questions about how to move forward and help this money grow. Of course, I am not a financial advisor and don’t play one on television, so our Redditor should set up a plan with someone more qualified. 

We know that he has a $192,000 mortgage left on a $550,000 condo, so there is a consideration around paying off the mortgage and being able to invest more. However, the Redditor smartly recognizes that he needs to talk to a tax professional as dividend earning will push him into a higher tax bracket. 

So, the real question is, what’s this Redditor’s next move? 

The Recommendations 

First and foremost, yes, this Redditor should immediately take steps to talk to a qualified financial advisor. He needs to work with someone to ensure that this money is being set up so that it can grow based on his level of risk tolerance and decide whether he still intends to retire now or keep pushing in the workforce for a few more years. 

The second most important thing to do is not to tell anyone. The last thing this Redditor wants is friends coming to him with their hands out and looking for him to help with a “great investment opportunity.” 

The same goes for if he has a girlfriend in the future, as a prenuptial agreement is an absolute necessity. There is no question this money needs to be protected, even if it seems like true love. Any money that comes into the marriage should be protected, at least according to many Redditor comments. 

Given that our Redditor believes he can live off $2,000 – $3,000 per month now, he should be able to invest the entire inheritance and live off his work salary until he officially walks away. 

However, he’s not factoring in the costs of growing a family, buying a home, and the expenses associated with a house, so he has to think long-term, understanding that it won’t just be him for a while. This might have him thinking about how to invest differently, and again, a qualified financial manager can help. Any plan he makes must be done so the realization won’t just be him forever. 

The Takeaway

My biggest takeaway right now is not to walk away from working, even if you have an immediate desire to do so. The idea of FIRE at 26 sounds great, but boredom can soon set in. The reality is that I would look for a job opportunity that doesn’t require a lot of stress but does allow you to have benefits and income coming in. 

If this Redditor can find work that would allow him to keep his brain active and continue benefits while allowing him to live an active lifestyle and enjoy his riches, he should do so. If he stays in the corporate world, 401(k) matching opportunities could create an even bigger retirement draw down the line. 

Many Reddit comments suggest that the Redditor should target $15 million by the time he reaches actual retirement age. Whether this is a reality will be established once he meets with an advisor and sets up an investment plan, but it’s not out of the realm of possibility. It’s a lofty goal to be certain, but given the Redditor’s age, with smart investing, it’s definitely not impossible.