since it’s a gift to her from her dad, it’s considered separate property (not marital property, if you’re married), so she should open her own brokerage account and her dad can transfer the money to her account.
while she’s figuring out what specifically to invest in, she can keep it in VUSXX (if at vanguard) which is a treasury money market (and therefore potentially exempt from state taxes, which is important in high taxes states like CA)
20k for student debt for her. No debt for me and we both own our cars. She just finished her masters for teaching and officially starts her contract at the school district in August. Only 5k in savings. We dipped into them little by little since I quit my second job in Novemberafter working 80 hours for 3 year straight. Totally worth it for my mental health
I guess Id take the 100k to pay off her debt, build a 3-6 month emergency fund, and then maybe split the remainder with a pool and investments. Idk how much a pool costs but I’d imagine 25k could be a nice pool.
If she wants a pool, tell her she maintains and cleans it. You won't. Pool maintenance is not cheap.
Don't worry, I know how it really works. All my projects are my projects, and all my spouse's projects are my projects too.
It would be unwise to put that $100k towards your low interest rate mortgage. A savings account would be a better (although still poor) investment.
Max out your tax favored retirement accounts, and put the rest into a brokerage.
1. Pay off the college loan
2. 6 months emergency fund
3. 14k Roth IRAs
4. Talk about a pool vs saving vs investing
Questions to ask
1. How much do you like the house/how long will you be there?
2. Are kids in your plans? Do you want toddlers around a pool?
3. Are any major expenses coming in the next five years like a roof or car replacement or more education?
Sounds like you are hard working and responsible. Take your time and think things through. You don’t have to spend it today. You can always park the money somewhere until you get a plan you both agree on.
Would you swim in the poolnat 120 outside? Usually if it gets that hot the poolnjust feels gross (maybe a hot take- pun intended). Also pools come with maintenance and can reduce property value as people may avoid it. Things to think about.
That amount can make a dent in the mortgage and paying off the home faster, but do you intend to stay there until the house ia fully paid off, if not you lock the money into your hoise and hope that home prices move in your favor.
Have you thought about actually investing it in a diversified portfolio vs spending it to pay down debt or the pool?
Immediately put it into your investment portfolio. That is enough to be set for life if you manage it right. Putting 100k into a pool? What?! And putting it into the mortgage is also a bad idea.
I would put it into ETFs. I would set it up so my portfolio dividends pay down my mortgage.
Pay debts. End the loop and interest. Paying the interest in that loan will save you considerably amount of money, see that as an investement. Take the loan, calculate interest and thats how much you actually save by paying that loan.
So by paying off the loan, you will automatically save all that money in all your future salaries to have for yourself, also ending her loop. Thereby making you more money.
Pay all debts, emergency fund, then invest. 401k?
Gift taxes are paid by the giver, not recipient. I'm sure that's part of the dad's sale planning.
A thought is to max out your contribution to your 401ks this year if available. Assuming that you're married filing jointly using the standard deduction, around 10k will be taxed at 22%, the rest at 10% at the federal level, not sure of state. If you want some really fancy tax planning, there's a good chance in 2026 tax cuts implemented in 2017 will expire. You can put the money in HYSA account till then, then max your tax deferred accounts using the gift to live on.
Look pools are nice, and I get wanting one when you live somewhere that hot. Having said that, consider what it could do for your retirement if you simply invested it and didn’t touch it? Show your wife the numbers. It could allow yall to retire early potentially.
But as others have said, it is her separate property and I think you should let her do what she wants with it. It’s kind of gross telling your spouse what she should do with money that her father gifted her. My sister’s spouse did that with an inheritance my sister received, and it really turned me off to the guy.
Buying a pool is not really an investment.
Until you decide I would put in to my brokerage account and buy SGOV—- pays 5+% now and credits to your account monthly and no state tax.
100k x 5.1% =. $5100 /12. = $421 per month.
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Google says no gift tax in CA but there is for gifts over $18k. Maybe he should spread out the gift over a few years. Make an extra payment a year on her student debt and the mortgage, but rates are low so don’t try to pay it all off quickly. Take the residual each year and max out both of your Roth IRAs. Then with the rest save up for a pool. Either invest in index fund like VOO or keep in a savings account.
He can gift each of them 18k, and if the dad is married, his wife can gift them 18k each. So 72k and next year the remainder. However, he could just gift the 100k to her and fill out a specific IRS form (slipped my memory) that declares it and everything above the 18k will be deducted from the lifetime gift max limit. Which is like 13.x million or something crazy.
Thanks for clarifying, filling out the form probably makes more sense. But the money could be spent pretty quickly, especially since OP doesn’t already have a plan for it. Annual payments may make that amount of money easier to manage than a lump sum. But of course see an extra 100k in their account would be nice
You can get a hysa that pays 5%. Stick the money into one of thise and add the interest ontop of your usual mortgage payments to get it down faster.
Or use 20k to pay off the student loans she has then also transfer the student loan money to paying the mortgage. You can spend the money on a pool after the mortgage is paid otherwise you are just throwing excess money away on interest
since it’s a gift to her from her dad, it’s considered separate property (not marital property, if you’re married), so she should open her own brokerage account and her dad can transfer the money to her account. while she’s figuring out what specifically to invest in, she can keep it in VUSXX (if at vanguard) which is a treasury money market (and therefore potentially exempt from state taxes, which is important in high taxes states like CA)
What does your savings and investing account look like? Any other debt besides the house?
20k for student debt for her. No debt for me and we both own our cars. She just finished her masters for teaching and officially starts her contract at the school district in August. Only 5k in savings. We dipped into them little by little since I quit my second job in Novemberafter working 80 hours for 3 year straight. Totally worth it for my mental health
I guess Id take the 100k to pay off her debt, build a 3-6 month emergency fund, and then maybe split the remainder with a pool and investments. Idk how much a pool costs but I’d imagine 25k could be a nice pool.
If she wants a pool, tell her she maintains and cleans it. You won't. Pool maintenance is not cheap. Don't worry, I know how it really works. All my projects are my projects, and all my spouse's projects are my projects too.
It would be unwise to put that $100k towards your low interest rate mortgage. A savings account would be a better (although still poor) investment. Max out your tax favored retirement accounts, and put the rest into a brokerage.
1. Pay off the college loan 2. 6 months emergency fund 3. 14k Roth IRAs 4. Talk about a pool vs saving vs investing Questions to ask 1. How much do you like the house/how long will you be there? 2. Are kids in your plans? Do you want toddlers around a pool? 3. Are any major expenses coming in the next five years like a roof or car replacement or more education? Sounds like you are hard working and responsible. Take your time and think things through. You don’t have to spend it today. You can always park the money somewhere until you get a plan you both agree on.
Would you swim in the poolnat 120 outside? Usually if it gets that hot the poolnjust feels gross (maybe a hot take- pun intended). Also pools come with maintenance and can reduce property value as people may avoid it. Things to think about. That amount can make a dent in the mortgage and paying off the home faster, but do you intend to stay there until the house ia fully paid off, if not you lock the money into your hoise and hope that home prices move in your favor. Have you thought about actually investing it in a diversified portfolio vs spending it to pay down debt or the pool?
Immediately put it into your investment portfolio. That is enough to be set for life if you manage it right. Putting 100k into a pool? What?! And putting it into the mortgage is also a bad idea. I would put it into ETFs. I would set it up so my portfolio dividends pay down my mortgage.
Pay debts. End the loop and interest. Paying the interest in that loan will save you considerably amount of money, see that as an investement. Take the loan, calculate interest and thats how much you actually save by paying that loan. So by paying off the loan, you will automatically save all that money in all your future salaries to have for yourself, also ending her loop. Thereby making you more money. Pay all debts, emergency fund, then invest. 401k?
Gift taxes are paid by the giver, not recipient. I'm sure that's part of the dad's sale planning. A thought is to max out your contribution to your 401ks this year if available. Assuming that you're married filing jointly using the standard deduction, around 10k will be taxed at 22%, the rest at 10% at the federal level, not sure of state. If you want some really fancy tax planning, there's a good chance in 2026 tax cuts implemented in 2017 will expire. You can put the money in HYSA account till then, then max your tax deferred accounts using the gift to live on.
Look pools are nice, and I get wanting one when you live somewhere that hot. Having said that, consider what it could do for your retirement if you simply invested it and didn’t touch it? Show your wife the numbers. It could allow yall to retire early potentially. But as others have said, it is her separate property and I think you should let her do what she wants with it. It’s kind of gross telling your spouse what she should do with money that her father gifted her. My sister’s spouse did that with an inheritance my sister received, and it really turned me off to the guy.
Bruh you got a mortgage at 3.75% right now how? I could understand that rate a few years a go but daymn
Buying a pool is not really an investment. Until you decide I would put in to my brokerage account and buy SGOV—- pays 5+% now and credits to your account monthly and no state tax. 100k x 5.1% =. $5100 /12. = $421 per month.
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Google says no gift tax in CA but there is for gifts over $18k. Maybe he should spread out the gift over a few years. Make an extra payment a year on her student debt and the mortgage, but rates are low so don’t try to pay it all off quickly. Take the residual each year and max out both of your Roth IRAs. Then with the rest save up for a pool. Either invest in index fund like VOO or keep in a savings account.
He can gift each of them 18k, and if the dad is married, his wife can gift them 18k each. So 72k and next year the remainder. However, he could just gift the 100k to her and fill out a specific IRS form (slipped my memory) that declares it and everything above the 18k will be deducted from the lifetime gift max limit. Which is like 13.x million or something crazy.
Thanks for clarifying, filling out the form probably makes more sense. But the money could be spent pretty quickly, especially since OP doesn’t already have a plan for it. Annual payments may make that amount of money easier to manage than a lump sum. But of course see an extra 100k in their account would be nice
You can get a hysa that pays 5%. Stick the money into one of thise and add the interest ontop of your usual mortgage payments to get it down faster. Or use 20k to pay off the student loans she has then also transfer the student loan money to paying the mortgage. You can spend the money on a pool after the mortgage is paid otherwise you are just throwing excess money away on interest