As a potential heir, it's a good idea to sit down and think about the money or assets you're about to receive. You want to know how to handle it well so that it can go the distance toward helping you in the future.
Did you know that two out of three baby boomer households are prepared to get an inheritance in their lifetimes? The average payout is an amazing $300,000. If you fall into this group, you want to be prepared for the money and assets that could be coming your way.
What should you do with your inheritance?
Once you receive an inheritance, it's a good idea to place it into secure accounts. For example, you may want to put it in a high-interest savings account, municipal bonds or short-term bonds until you're sure of what you'd like to do with it. This money can continue to make money for you, which is a massive benefit.
Now, it's time to make a financial plan. Usually, people take inheritances and pay off debt first. Start with things like credit cards and move on to the next-highest interest rate items. This gives you a great return on investment since you no longer have to pay out monthly for these debts.
Finally, fund your retirement. Even if you have a solid retirement plan in place, it never hurts to have more. Invest in your 401(k) plan, a Roth IRA or other services to give yourself what you need to live comfortably once you decide to stop working.
These are a few tips for handling an inheritance. Make a financial plan first, so you know how you want to spend that money.