Windfall options?

[El Trombopag]

My wife and I just sold her old house and cleared around 650K. Our accountant has looked over everything, and we're now left with it sitting in our checking account 'ready to spend'. I'm trying to figure out the best way to manage it. As a one-time influx, there might be considerations other than just distributing it among our retirement accounts.

Assumptions: I'm early 40's, she's mid 30's, no kids, no health issues, no debt other than a single mortgage. Our current portfolio is somewhere around 750K [mostly vanguard, my 401K], combined yearly gross salaries a little over 300K. Jobs are stable, either could life well without the other's salary, typical retirement goals [if there is such a thing]. All taxes satisfied on the sale.

Additional assets include a large parcel of land that we own outright and are replanting/reforesting -- it's strictly a labor of love, but one that will provide a fair amount of tax write offs. This takes up most of our 'free time'.

Neither of us is particularly financially savvy, the default move is to distribute it all into our vanguard funds. Obviously, we have significant tax liabilities on our yearly incomes, and I'm wondering if there might be other 'creative' options for this windfall. We don't have the time/inclination to become landlords or 'business owners' per se, but maybe there are options we hadn't considered. We're never going to harvest what we're planting on the parcel, but have considered setting up a LLC assuming so on paper ['showing a profit' rules are a little different in timber]. But to be honest, we don't know what we're doing.

Any reason to think differently about this amount because it is currently fluid?

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[Apramana]

If you haven't encountered the information in them yet, reviewing the windfall wikis on Bogleheads and Reddit personal finance might be worthwhile:
windfall - personalfinance
Managing a windfall - Bogleheads

Both websites have active forums, where windfall discussions seem to occur frequently. (Googling "Bogleheads windfall" populated quite a few discussions on the Bogleheads forums. I believe there's also a search function on the Bogleheads forums.)

Those forums might be worth looking into, especially if you don't get much insight here.

The White Coat Investor also has some windfall-related articles:
My Experience With a Windfall

I hope that helps. Please have an awesome day, and best of luck with the windfall

 

[Fatihful Steward]

From a stewardship perspective, I would suggest paying down, or eliminating your mortgage. Then, using any remaining windfall to max out this year's retirement plans and backdoor Roth IRAs. If there's still remaining windfall, I would suggest investing in a joint brokerage account using highly tax-efficient investment vehicles. Keep in mind, this is general advice and not tailored to your unique situation.

 

[Entadus]

I would probably give away some significant fraction to a worthy cause. Maybe set up a scholarship for med students?

 

[Mman]

From a stewardship perspective, I would suggest paying down, or eliminating your mortgage.

While that would not be a bad thing to do, gotta wonder how much utility you get from paying down/off what is likely a fairly low interest rate mortgage that you are paying tax deductible interest on, and over time of which it is a nice hedge against inflation.

 

[The White Coat Investor]

My wife and I just sold her old house and cleared around 650K. Our accountant has looked over everything, and we're now left with it sitting in our checking account 'ready to spend'. I'm trying to figure out the best way to manage it. As a one-time influx, there might be considerations other than just distributing it among our retirement accounts.

Assumptions: I'm early 40's, she's mid 30's, no kids, no health issues, no debt other than a single mortgage. Our current portfolio is somewhere around 750K [mostly vanguard, my 401K], combined yearly gross salaries a little over 300K. Jobs are stable, either could life well without the other's salary, typical retirement goals [if there is such a thing]. All taxes satisfied on the sale.

Additional assets include a large parcel of land that we own outright and are replanting/reforesting -- it's strictly a labor of love, but one that will provide a fair amount of tax write offs. This takes up most of our 'free time'.

Neither of us is particularly financially savvy, the default move is to distribute it all into our vanguard funds. Obviously, we have significant tax liabilities on our yearly incomes, and I'm wondering if there might be other 'creative' options for this windfall. We don't have the time/inclination to become landlords or 'business owners' per se, but maybe there are options we hadn't considered. We're never going to harvest what we're planting on the parcel, but have considered setting up a LLC assuming so on paper ['showing a profit' rules are a little different in timber]. But to be honest, we don't know what we're doing.

Any reason to think differently about this amount because it is currently fluid?

I'd probably pay off the mortgage and invest the rest into your portfolio, i.e. Vanguard funds in a taxable account. I think you'll like life without a mortgage. I do.

 

[Stroganoff]

Pay off your mortgage then look into the FIRE community. You technically have enough to be financially independent and retire early if your annual expenses are kept in check. If you don't want to pull the plug immediately, you'll be in a very strong position within ~5 years at your combined income to have several million in assets, which is more than enough to reduce your workload to part-time or zero and do whatever you want with your lives for the rest of your lives. In other words, you can work for the pure joy and satisfaction without "needing" to work for survival purposes.

 

[Apramana]

Reddit's FIRE community seems to be pretty active, for reference:
financial independence / early retirement • r/financialindependence

Depending on the finance context, FIRE seems to be defined as: "Financially Independent/Retiring Early". [Edit: That was potentially less clear when the link above was just the bare URL ]

From the sidebar at the reddit link above:
"At its core, FI/RE is about maximizing your savings rate (through less spending and/or higher income) to achieve FI and have the freedom to RE as fast as possible. The purpose of this subreddit is to discuss FI/RE strategies, techniques, and lifestyles no matter if you're retired or not, or how old you are."

I hope that helps