What to do with inheritance?

[Beaglehound]

Any and all opinions welcome.

My father recently passed and in due course I will be receiving an inheritance of c.£150k. It’s not money I was ever counting on as he was in a care home latterly and that eats cash, but my sister and I sold his house for more than expected and so I have the nice problem of what to do with it.

I can leave it in a reasonable paying U.K. savings account for a while, but will eventually look to bring it over here, and I am thinking of using it to gradually fill the new NISA. But I am not sure how best to invest it. For background, my wife and I are 53 and won’t need the cash before 65 at least. I am looking at a target date fund as a ‘set and forget’ option, but wondered what others would do in this scenario?

[captainspoke]

You probably know or are aware of most of it, but this might be worth a read-through:

https://www.bogleheads.org/wiki/Managing_a_windfall

[RetireJapan]

I can leave it in a reasonable paying U.K. savings account for a while, but will eventually look to bring it over here, and I am thinking of using it to gradually fill the new NISA. But I am not sure how best to invest it. For background, my wife and I are 53 and won’t need the cash before 65 at least. I am looking at a target date fund as a ‘set and forget’ option, but wondered what others would do in this scenario?

It's going to depend on what other investments you have, what kind of pensions you're expecting, etc.

Is this money going to be extra luxury or something you need for living expenses?

[Beaglehound]

I can leave it in a reasonable paying U.K. savings account for a while, but will eventually look to bring it over here, and I am thinking of using it to gradually fill the new NISA. But I am not sure how best to invest it. For background, my wife and I are 53 and won’t need the cash before 65 at least. I am looking at a target date fund as a ‘set and forget’ option, but wondered what others would do in this scenario?

It's going to depend on what other investments you have, what kind of pensions you're expecting, etc.

Is this money going to be extra luxury or something you need for living expenses?

I should get full U.K. pension, wife around half (potential to increase that with voluntary contributions), I should get around half Japanese kokumin nenkin (planning to pay in until 65), wife projected to get c.1.3m yen per year from her nenkin all being equal. We own our house outright. Around 35 million yen between us in Ideco, investments, bank accounts, etc.

I am fairly comfortable that the above (plus we are still working and saving) should see us alright for living expenses, so I guess I am viewing this extra money as extra money. So I don’t think there is much need to take huge risk with it (no kids), but don’t want to let it sit in the bank being inflated away either.

[Beaglehound]

You probably know or are aware of most of it, but this might be worth a read-through:

https://www.bogleheads.org/wiki/Managing_a_windfall

Thanks, it is not a huge windfall, but is a windfall nonetheless, so it was helpful to read the advice in there about there being no need to act hastily. It’s a different psychological situation from usual; I am used to saving what I can and investing it slowly and steadily, which is not too difficult. The process of investing (and eventually drawing down) a sudden large sum is quite different I am finding.

[RetireJapan]

Personally if I was already more or less set (as you seem to be) and received a windfall, I would keep some of it in cash and invest the rest for growth (world stock fund). You've got at least a couple of decades before you spend it all, as it will likely be used for luxury or extraordinary spending (your current pensions and investments can cover normal living expenses).

But there's no wrong answer here.

More of what you are already doing?

[northSaver]

If you don't really need the money for retirement then I would spend at least some of it right now on something you'd both enjoy, such as the trip of a lifetime, a camping car, a holiday cottage, new TV, car, bike, etc. Life is not just about saving! You should spend some excess cash while you're relatively young and healthy, particularly if you don't have children / grandchildren to give it to. Just my opinion

[RetireJapan]

If you don't really need the money for retirement then I would spend at least some of it right now on something you'd both enjoy, such as the trip of a lifetime, a camping car, a holiday cottage, new TV, car, bike, etc. Life is not just about saving! You should spend some excess cash while you're relatively young and healthy, particularly if you don't have children / grandchildren to give it to. Just my opinion

That's a really good point! Maybe a quick review of Die With Zero would be in order?

[Beaglehound]

If you don't really need the money for retirement then I would spend at least some of it right now on something you'd both enjoy, such as the trip of a lifetime, a camping car, a holiday cottage, new TV, car, bike, etc. Life is not just about saving! You should spend some excess cash while you're relatively young and healthy, particularly if you don't have children / grandchildren to give it to. Just my opinion

An excellent consideration. It has been on my mind that we need to do the things money can facilitate while we are still able to.

[Wales4rugbyWC23]

I would buy a buy to let flat in the UK, although 150k won't go that far down south, anywhere north of Brimingham would get a two-bedroom flat for that price. I don't think you would pay stamp duty either, if it is your first purchase. Ideal passive income for retirement.