Inheritance! Any tips?
I just received a significant inheritance: $850,000. While certainly not enough money to retire to a life of luxury and leisure, it is enough to make some major changes for my family. My wife and I have had many challenges over the years, including a consumer proposal about 10 years ago, but we've come out the other side and we are currently doing "okay." This money will certainly set us up for the future, but I want to make sure we use it in the best way.
Our current situation
- I earn about $125,000 annually. My wife hasn't worked in almost a year, on doctor's orders (stress). She was, previously, earning about $50,000. I suspect this windfall, and the reduction in monthly expenses which will follow, means she won't have to go back to full-time work.
- Our current debt consists of $225,000 mortgage, $56,000 LOC, $100,000 Home Equity Loan with Capital Direct. We also have 2 financed vehicles for about $350 each per month.
- We have 2 children, 18 & 15. We have RESPs for each, but they will really only cover year 1 of a university education. Our eldest starts school in the fall.
- We have no retirement savings. My work offers a matching program, but I won't be eligible to participate in that for another 6 months.
We have immediately paid off the LOC and will pay the HEL when the "window" opens in March to avoid extra fees. We have an appointment booked at the bank to discuss closing the mortgage -- I don't want to get stuck with excessive fees, if I can avoid it. The increased monthly cash flow (about $2200/month) and the piece of mind of not having those over-hanging debts is invaluable to us.
Next step would be to put aside some money for the kids to ensure they're both covered for school. We've got some renos to the house we'd like to do, and we'd like to put the rest away where it will work for us and actually allow me to retire and not work until I die.
The balance is currently about $700,000, sitting in a 3% Simplii account. Obviously, in our late 40s, we are looking for conservative risk with decent return. We don't have a financial planner. I've looked at WealthSimple and Nest Wealth... I'm thinking those are good options.
But, I've always gotten decent advice here, so to RFD I turn. What would you do in my shoes?