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Question: I’m 45 and I’ve barely invested in the stock market. I recently inherited $50,000. What should I do?
Answer: Well, to start, congratulations on your recent windfall. When invested responsibly, $50,000 can certainly get you well on your way to building your nest egg.
As for what to do with the money, there are two fundamental questions you need to answer.
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The first is where to put it, or what types of accounts you should open.
And the second is what specific investments you should buy. Let’s tackle that first question first.
What accounts should you open?
Every person’s situation is a little different here, but we can start with some planning basics. Do you have an emergency fund in place to cover you in the event you lose your job or have some large, unexpected expenses pop up?
If not, it’s a good idea to set aside a couple of months’ worth of expenses and keep them separate in a savings or money market account.
Once that is settled, your best option will likely be to open a Roth IRA. Roth IRAs allow for tax-free compounding of capital gains, dividends and interest, and there is no tax due when you take distributions in retirement (or after age 59-½.)
A 45-year-old can contribute up to $7,000 for tax year 2025 – you have until April 15, 2026, to contribute – and $7,500 for 2026. So, a married couple could potentially sock away a quick $29,000 for the two tax years.
There are rules here, though, so you’ll need to make sure you qualify. To start, you (or your spouse) need to have earned income from a job or a business. Additionally, your income has to be within certain limits. The maximum modified adjusted gross income (MAGI) to make a full contribution is $150,000 for single filers and $236,000 for those filing jointly. In 2026, those numbers jump to $153,000 and $242,000. The amount you can contribute to a Roth IRA starts to phase out above those levels.
Great.
But let’s say you earn too much to qualify for a Roth. What then?
You can always contribute to a non-deductible traditional IRA and then do a “backdoor” Roth conversion. (You can read more about the ins and outs of backdoor Roth conversions here.)
Once you’ve stuffed everything you can into a Roth IRA, any remaining investable cash can be put into a regular brokerage account.
What investments to buy
Now for the fun part.
You have your accounts open, but what investments do you buy?
The answer here will vary based on your experience and your existing investments (if you have any).
If you really are a blank…
Read More: I’m 45 and I’ve Barely Invested in the Stock Market. I Recently Inherited
