Personal Finance

I'm 30 years old and just found out I have a $3.5 million trust that I never knew I was going to get - how much can I spend each year?

Maurie Backman

Published: January 21, 2025 6:19 am

You’ll often read about trust fund kids — individuals who grow up surrounded by wealth, attend fancy schools, and generally live a life of privilege from a very young age. But what if you don’t discover that you’re the beneficiary of a very generous trust until your 30th birthday?

That’s what happened to this Reddit poster. They found out they’ve got a $3.5 million trust coming their way, and they want to know how to use it. They’re particularly interested in maximizing the fund’s growth while also figuring out how much of that trust they should spend on a yearly basis.

It’s clearly a good problem to have. But it’s also important not to mess things up.

Setting priorities is crucial

The poster above is a person of modest means — or at least they were before they discovered their $3.5 million trust. They earn $150,000 a year, have around $100,000 in retirement savings, and have another $100,000 in a high-yield savings account. Their lifestyle is pretty simple, with two paid-off cars as their main luxury.

The first thing I’d caution this poster about is lifestyle creep. It’s common for people to start increasing their spending dramatically as their income rises. Similarly, it can be tempting to take on a host of new expenses when you learn that you’ve got a multi-million-dollar windfall at your disposal.

But while $3.5 million is clearly a lot of money, it can disappear pretty quickly if it’s not managed wisely. So in that regard, I’d tell the poster to proceed with caution. And before spending so much as a dime of that money, I’d tell them to make a list of financial priorities and use that windfall in a way that aligns with them.

So let’s say their priority is to retire early and own a home outright. In that case, I’d say that they should find a comfortable home in their preferred neighborhood and see what that’ll cost them. From there, they can invest the remainder of their trust so it continues growing while they continue to work. With a paid-off home, they may find that they don’t need to tap their trust fund to cover everyday expenses, allowing that money to grow until their ideal retirement age.

It pays to work with a financial advisor

Any time you’re dealing with a large and sudden sum of money, I recommend consulting a financial advisor for guidance. In this situation, the poster can really benefit from working with a professional because they can help them invest their trust in a manner that lends to steady growth without taking on undue risk.

A financial advisor might advise this poster to invest a large portion of their money in an S&P 500 ETF. Or, they might favor a portfolio of individual income-producing stocks.

The good news is that the poster has many options now that they’re sitting on $3.5 million they didn’t know they had. But it’s important to not blow that opportunity by making rash decisions.

Another thing — when you come into money, it’s important to stay true to who you are. In this poster’s case, they might have the funds to purchase a $1.5 million home and still have plenty of money left over. But if they never wanted a $1.5 million home before, and they can be comfortable in a $500,000 home, then why spend above that?

A financial advisor can help you stay grounded when you’re dealing with a situation like this. So aside from investing advice, that’s another reason to bring a professional into the mix.