How to deal with a big cash windfall

DiggerUK

curi, inheritances are bitter sweet moments for anyone. Your inheritance was gladly left to you however.
As you have got back and replied once you started this thread, I have every reason to accept you as genuine.

On top of that, you are in a similar position to Digger Mansions. For us it was a no brainer, all spare loot went in to gold. I would urge you to consider going in that direction yourself. It's not for everyone, and I would insist you go in that direction because you understand what you are doing, not just following what seems to be the latest 'hot investment'.
Best of fortune.
..._

Tuesday_Tenor

>>>>> I'd rather do that lot in my fifties than my seventies.
This is what's influencing my own plans. I'm enjoying being fifties and healthy and active. Many of my parents' generation have lived well into their 80s and 90s; however, just recently several of my own friends, neighbours and former work colleagues have died in their 50s and 60s (accident; heart attack; 2 x cancer). This puts things into perspective and helps me prioritise what I want to do over the next 10 years. I hope I'm around well into my 70s and 80s but I'm not going to worry about being financially poorer at that stage. Most of my interests aren't expensive and I can always rent a room out, as I had to in the early days!

OP, reading your posts and the replies is helping me focus, too. (Thanks to all).

I'm in a similar-ish position, so your situation resonated with me:
Similar: age; worked 30 years; gave up work 3 years ago to care for first one parent (full-time care 24/7) then the other (general support till he died suddenly in January); was able to choose to do this by living off own savings ; inherited value of property; own house is mortgage-free; no children or other dependents.

Slight differences: smaller inheritance, smaller savings, smaller pension and doesn't start till age 60.

Possible differences: Own house needs renovations; Loved my job till the moment I gave it up (then did not miss it as all!). Lots of other hobbies and interests already in my life, previously constrained by lack of time. My previous field of work (care, especially dementia) is something that always needs staff and I could choose to go back into it at different levels, whether 'hands-on' (low-pay; but no managerial hassles) or managerially (with great challenges). [Am reserving some of the £££££ in case I want to start my own business in a couple of years. Not a fortune-maker; more a service/contribution to my local community!]].

This year has been sorting out Dad's estate, clearing and selling the house. Very sad, even though it wasn't the house I grew up in. Then I spent much of spring/summer helping to organise a music festival (voluntary role with something I was already slightly involved with, but was now free to contribute substantially). Then a longer-than usual holiday (3 weeks, and first time abroad for 6 years due to family committments).

Now I'm back, and think I'm only just coming to terms with the dis-orientation of the changes. Losing both parents IS dis-orientating: life will never be the same again. There is a grieving process; and possibly we can't properly move forward with great enthusiasm until some time has passed. I find I swing between some very positive days, starting to put into effect various plans and ideas, as below, and other days when I waste time, can't focus, watch TV (which I previously didn't have at all for 10 years) and seem 'lost' without the structure provided by work/caring for parents. I'm not going to worry about the 'pathetic' days until the new year (first anniversary of Dad's death). I suspect that by then this phase will have passed, anyway. I'm just being gentle with myself while I go through it.

So, what do I want to do with my inheritance/savings? I'm NOT going to plan it all out to last till I'm 85. I've always lived my life thinking about what I'd like to have done in the next 10 years, in case that's all I have, and I'm continuing with that philosophy. [10 years isn't frighteningly short, yet focusses the mind]. The difference now is that whereas building up savings was always previously an aim, I'm now going to make this decade the one in which I spend WHATEVER IT TAKES to do exactly what I want while I'm fit and able!

So, some ideas:
- New kitchen/overdue general decorating/solar PV panels on the house. Then very little to be done on the house for the rest of my life!
- Travel: 3-month train trip across the States (main friends are in Boston and Seattle!); maybe even do QueenMary across the Atlantic. (Not into cruises generally, but would love to get the sense of scale/time that is lost through air travel). Venice. More of Spain and Latin America. (Hablo Español). I'm a host for international travellers, so have lots of contacts already! See friends round the UK that I haven't seen for a while due to caring responsibilities.
- More time for existing interests and hobbies : walking the hills (get dog AFTER big travels); gardening; family history; singing; improving a foreign language.
- Then some new things that I wouldn't otherwise have thought to spend my time/money on, but would love to do before I'm too old: learn to ride a horse ; go on an archeological dig. Maybe even an archeology course? Maybe sailing (just to have 'had a go')?

There, that'll keep me busy for a while! Any of this inspire you, Curi?

The joy of the internet is that you can easily start finding out about options. (Only just started thinking about the archeology stuff; will go surfing soon ....).

What would YOU like to have done by 2020? You now have the wherewithall (both ££ and time) to do it! So go for it ... when you're ready ... Good luck!

curi

"There, that'll keep me busy for a while! Any of this inspire you, Curi?"

It does. It's good to talk to someone in a similar situation. You describe dealing with the estate and clearing/selling the house. Yes, these things take time, depending on the complexity. It took me five months to finalise my mum's estate, but I did put it aside for a month at one point, getting overwhelmed with it.

Possibly where we differ is that you have a better outlook regarding the money. As I've always paid my way, I'm worried it might run out if I live too long, but as you say (and I did a lot of thinking about this a while back), any of us could pop off earlier rather than later, so why not enjoy it? Maybe it would just be unlucky to live too long. Sometimes I find it ironic to perhaps be in a very good financial situation, and worrying more than I ever have.

And the same applies about up and down days, loss, change etc. You are focusing on the year anniversay to perhaps break out of the feelings and let it pass. I do wish you luck, as I've been the same.

curi

Just one other thing for Tuesday Tenor....that pension coming at 60. Is it written that you can't get it until that age? I thought private pensions were available at 55.

Tuesday_Tenor

Glad something resonated for you in the similar situation. It's a strange time being free of money worries (Well I feel I am, even if you don't! 'Potentially free', in your case!) yet still dealing with the sadness and grief.

I'd much rather dad was still here. I'd not been close to him most of my adult life, but since Mum died we'd had a good, quiet time together over 2 years with me spending alternate weeks with him (120 miles away) to do the big shop, provide company, deal with the finances and attend appointments with him. His problems were communication ones (very deaf, and language problems following a mild stroke 10 years previously, so he struggled with phone calls and visitors) but he was otherwise, at 87, fairly independent in a practical sense. In fact his health had been VERY stable over the last three years and I was gearing up for a good few years of decline and problems before he eventually 'popped off'. So it was all a bit of a shock when he died. Still, I hope I go as he did: 87, Fine on Friday, Ill at home Saturday, Ill in hospital Sunday, Fatal heart attack in the hospital Monday morning. He would have hated to be ill or incapacitated for long, as my mother was. So probably the way he'd have wanted to go.

But it's all the more adjustment for me; suddenly (well eventually after selling the house etc.) being completely 'free' when I'd been expecting to be becoming more 'tied'.

>>> to perhaps be in a very good financial situation,
No 'perhaps' about it. You are in a VERY enviable position!!

>>>> and worrying more than I ever have
A few thoughts on 'worries':

The sorting out where to save the inheritance has taken a bit of time, but I haven't regarded it as a great worry. Rather, an unusual and nice problem to have! I've made good use of the MSE Savings Guide over the last 6 months, and been checking there regularly for 'best buys', so when the money from the house sale came through in August I pretty well knew what I wanted to do with it. I don't want anything high maintenance and even generally (tho there is a large exception to this) avoid the '12-month bonus' interest rates as I don't want the faff of switching accounts every year. Everything is in fairly conventional easy access accounts (for the renovations and travels) , or tied-up bonds of varying durations. I haven't used an IFA: my estate won't be over the IHT threshold, quite a bit will be spent soon (renovations and travel) and I feel OK about the level of research I've done myself. I'm a low risk saver, too. Not going for investments, though my sister's been doing this, and apparently successfully, for years. But no, higher risk strategies WOULD worry me!! We don't all have the same attitudes to money and to risk!

Knowing I can happily live frugally is also a great strength. Though I'm planning to spend a lot in my 50s I know I CAN live well without doing so. That's how I managed to save in the first place! I've done odd bits of respite care work sometimes during the weeks I wasn't at Dad's (that's how I know i can always do this again in future). However, during the last 3 years I've lived largely off my existing savings, and have actually lived very frugally, aiming to make them last as long as possible. My life is rich in other ways (friends, countryside, inexpensive interests, and I live somewhere I COULD manage without a car) and I know I can live on relatively little. So I'm not worried by a financially impoverished old age if my money runs out. If I ever need to go into care or sheltered accommodation, I have the value of my OWN house to cover many years existence, so I don't feel my inheritance has to be saved for this.

Have you been living frugally while caring for your parents as you haven't had time for an exciting life? If so, you might already know that (having no mortgage or rent) the £22K pension will be more than ample for a very good standard of living. With a good pension and a house, you won't need hundreds of thousands of pounds left from the inheritance at age 80. So start now (i.e., when you're ready) enjoying thinking about what you really want to do with the rest of your life, focussing on the next 10 years in particular! The big issues will be

(a) Are you living where you want to (general location, and your current home)? [I am. Need renovations, but no plans to move].

(b) How do you generally want to spend your time? Do you need the routine/structure of a 'job' doing 'something' everyday. Do you want to use your existing skills or learn new ones? Is there anything you want to have done in life that you've never had the opportunity (funds/time) for. Now's your chance!

[Personally I'm still working out the routine/structure issue. I've worked (generally 9-5) for 30 years, but I don't like my days to be too 'routine'. Think I'm OK with having projects for a few days/weeks/months, which is just as well with all the decorating and travelling I'm thinking of. But note I'm typing this very late; maybe I do need some structure imposed ....!]

Neither (a) nor (b) need immediate answers. You also have the luxury of having the time to work out what you want to do!
So, yes, count you blessings!

HTH

Tuesday_Tenor

Retirement age:

On a small private pension, my 'normal retirement age' is 60 and the forecast info is based on that. You're right, it does say that I could choose to start taking the pension benefits from 55. This would affect the future benefits though, so isn't something I'd consider in preference to finding some part-time work. [Unless I was unable to work for some reason].

RobStaffs

I think I would plan on how to spend it while you get can the most satisfaction from it.Its entirely up to how you spend it.Not all one go but plan your choices over say the next ten to fifteen years.Dont see much point in investing it for a later day.

curi

Tuesday_Tenor wrote: »

In fact his health had been VERY stable over the last three years and I was gearing up for a good few years of decline and problems before he eventually 'popped off'. So it was all a bit of a shock when he died. Still, I hope I go as he did: 87, Fine on Friday, Ill at home Saturday, Ill in hospital Sunday, Fatal heart attack in the hospital Monday morning. He would have hated to be ill or incapacitated for long, as my mother was. So probably the way he'd have wanted to go.
HTH

Well, that's yet another similarity. In my mum's case, leukaemia, drugs failed, palliative care, etc, and told "weeks to live" in February 2010 after an infection. She lasted until October 2010, fairly well, but depression had sunk in, but one weekend it went wrong. Okay on the Thursday and in hospital on the Monday (after two doctor visits over the weekend). I finally dialled 999 ignoring their advice. And she died 5 days later. That's another story about the doctor's 'advice'.

As for the bonus accounts, yep I do them and keep an incredibly close eye on them to get the best of 'low risk'. Like you I have been fairly frugal and can still be, although I got some fish and chips the other day. £7.50 for medium cod and chips! Won't be doing that every week.

I also think all the other things you say about 'moving on' etc are spot on, like finding something to do.

The other thing about your pension - it sounds like mine. At 60, I could take (projected) £29,000 (before tax), but they lob off 5% for every year you take it earlier.

Once again, thanks for the advice and chat.

droopsnoot

curi wrote: »

My trouble is, I wake in the middle of the night worrying if I need to get back into work (which was a stressful job). Then I work it all out again (given the economy) and my less than ostentatious spending. It seems most think I'm in a good situation, so maybe I should finally realise that and just live it out.

That's just natural if you've been in work for a long period of time and are suddenly out of it - it's hard to get your head around the fact that you don't actually need to go to work, and you'd have to do something monumentally daft to be back in that situation. But with the climate and seeing others in the same position but perhaps without the safety net that you have, it's bound to make you worry.

The solution? I don't know, I'm also out of work (for different reasons) for the first time ever, and reasonably comfortable (though less so), but it's still hard to get your head around.

RetiredInThailand

Tuesday_Tenor wrote: »

So, what do I want to do with my inheritance/savings? I'm NOT going to plan it all out to last till I'm 85. I've always lived my life thinking about what I'd like to have done in the next 10 years, in case that's all I have, and I'm continuing with that philosophy.

Great. I also believe in doing things sooner rather than later, as you never know what you may no longer be able to do tomorrow, for whatever reason.

But what happens if you have fun and spend your money in the next 10 years or so and then don't die at 65, but carry on in good shape until you are 80 or 90, or even 100?

Those 20 or 30 extra years could be very unpleasant indeed if you dont have some padding put by.