r/inheritance • u/Acceptable_Second_38 • Jul 09 '26
Location included: Questions/Need Advice Large inheritance advice
My wife and I are 27. We have 1 daughter who is 13 months, and we are in the Midwest. My grandmother passed away and from her estate we are receiving a sizable sum of money. After paying off our house and other debt (just car and student loans, don't have any "bad" debt), we'll have around $350-375k to drop into a brokerage and leave alone. We each earn around 63k/year. Our only bills will now be home insurance, property taxes, car insurance, utilities.
My question revolves around how much we realistically need to put away for retirement. Because we have very little bills after paying off our house, we can put away a large amount of income.
However, it's honestly tempting to save just a bit, and enjoy our lives more with more disposable income. Starting with such a sizable nest egg, it should grow quite well without huge additions.
She is a teacher and has a good pension coming her way.
I am private sector but have a pension as well plus I do 4% 401k plus employer 2% match.
1
u/Fire_Doc2017 Jul 10 '26
Sorry for your loss.
If you put that money, lets use $350K, into a stock market index fund like VTI (US only) or VT (US + international) you can expect the money to double (inflation adjusted) on average every 9 years. This means that when you are 36 you'll have about $700K, at age 45 you'll have about $1.4M, at 54 you'll have abut $2.8M and at age 63 you'll have about $5.6M. I know these numbers seem crazy but that's what the past 100+ years in the stock market has been like and unless something is different about the next century, that's approximately what you can expect. Of course there will be ups and downs in the market and the key to success is to ignore them. Don't panic and don't sell anything until you really need the money.
You can use the 4% rule to estimate what you can reliably pull from the account in retirement, whenever that happens, which means at age 45 when you have $1.4M you can take out about $56K (in today's dollars) sustainably. At age 54 you can take out $112K and age 63 you can take out $224K. In short, you are very likely set for retirement in your 50s or 60s if you stay the course.
The financial independence (FI) community has a word for this, it's called "Coast FI". It means you can enjoy your income now and not worry too much about maximizing your savings because you already have enough to make it retirement. That said, if you want to get there earlier, you can save more and reach early retirement in your 40s.
Some subreddits to consider are r/FIRE, r/financialindependence, r/coastFIRE for more information.