i just inherited 250K, but they're giving me the choice

bumping for pls fucking help this is important

If you don't know much or care to know much about investing, then buying a house outright now will set you up well for the rest of your life, never having to pay rent or mortgage repayments.
Though if you don't have a stable job at the moment you should get one first, you'll still have property taxes, bills and maintenance of course.

Just don't do the retarded thing and use the $250,000 as a downpayment for a much larger house then you could have ever possibly afford. Use it to buy outright or at least most of it, leaving only a very small and manageable mortgage.

Unless you're interested in investing, then you have a lot to learn about leverage that can't be taught here by randoms on the internet.

On another note, if you're terrible with money, put it in an IRA because otherwise you're going to end up blowing it by the time your 21 without a clue of where it went and nothing to show for it.

You can roll it into an IRA and just pay taxes on withdrawals, you don't need to take a lump sum all at once.

It sounds like you are in trouble either way. With maybe some rare exceptions, you would have to be a moron to buy a home at 18. How do you know what your career/life in general will be like a few years from now?

If you're reasonably self-sufficient already, the best move would be to find a fee-only advisor who can manage the IRA for you and answer tax questions. Ideally you don't touch it unless absolutely necessary.

>>1574635
>You can roll it into an IRA and just pay taxes on withdrawals, you don't need to take a lump sum all at once.

apparently i can't do that until i've had the account for 5 years. I'm going to inherit like 200K more within a decade, so I really don't need to save every penny i have. I want to buy a house. I like my area. I have a job here. I just want a house.

Throw it into index funds and then go to college and get yourself a job.

Let the money grow for four decades and retire early

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>>1574642

>>1574648
but you wouldn't make 6.59% each year so that doesn't matter.

>>1574553
So did you inherit and IRA account (which is why you'd have to pay tax if you don't roll it into an IRA)? You're basically throwing away $50k if you don't roll it into your own IRA. Unless you really need the money, just roll it over and invest it in diversified index funds. Your future self in 30 years will be thankful that's what you did.

>>1574652

Assume it's half wrong then, you're still at 2.5 million

With that amount of money i dont know what i would be looking to 4chan for investment ideas.

Personally I would put it into a 401k or some other type of tax shelter and then take out what you need for a down payment. Its likely the penalties will be much lower then what you would pay in taxes.

That being said 401k isn't always the right choice . For a young investor there are other retirement funds you could look into that would allow for exemption of estate and income taxes

For real.. talk to a bank

>>1574656
but i'll save more by buying a house at 18

Op what type of account is it currently in?
Will you have to take RMDs?

>>1574553
Save half, invest half.

>>1574680
You're obviously bent on buying a house, so why are you even asking? Go buy a house.

>>1574762
fug it

>>1574769
Please, please spend it all on a house tomorrow. You don't deserve this money so I would very much enjoy seeing the government and real estate market take a huge chunk out.

>>1574660
I don't know if that's how compounding interest works...

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>>1574801
I'm going to take out $10,000 for a 20% down payment on a house and keep the rest in an IRA for maximum returns. stay poor and mad faggot :)

>>1574814
It's not. He's just retarded.

>>1574801

asshole

>>1574769

Make sure to research first, and include things like property taxes/upkeep into the buying price!

And if possible, negotiate a price for the house /before/ you tell them "i'll pay 90% of what we agreed on, in cash. Take it or leave it"

Never heard of bitcoin, dumb fucking kid?

Who gives a kid 250 grand?

Just buy a brand new car or something

>>1574887

buying a small amount (2-3k) of bitcoin wouldn't be a bad idea. No reason to be a rude asshole, though.

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>>1574553
Invest in Trumpcoin

>>1574553
You can borrow against an IRA for your first home with no penalty. Borrow and pay yourself back so that all interest goes to yourself.

>>1574628
aids and herpes will show you something

OP,

I dont know if you are still around, but I can try to help. You are inheriting an IRA. You can roll this over into an "inherited IRA", which keeps the same classification as the IRA had before you inherited it.

How old was the person you are inheriting this from?

If under 59.5, then you will have a 10% tax penalty on any withdrawals. In this case, DO NOT take the distributions, roll it over into an inherited IRA and call it good.

If the person you are inheriting this from is over 59.5, then you can take distributions and just pay tax on the distributions as taxable income.

If the person was over 70.5, you will have required minimum distributions, which are calculated based on the value of the inherited IRA.

Remember that if you take $250,000 out of the IRA, you are going to pay tax on it as income. If your state has income taxes, then you will pay state taxes on it as well.

I inherited an IRA from my dad last year, but because I didnt have an immediate use for it, I left it in an inherited IRA where it sits today. Its only worth a fifth of what your is, but I will have a need of it one day, and will use it then.

Christ.. are you finished with school? Are you employed?

.. and what's with the house dream? It may sound like a great lot of fun (especially when your friends tell you what it'd be like), but actually owning a house is not like being home alone.

>>1574553
There's no after taxes with inheritances. The fuck are you talking about OP?

In response to your entirely dubious assertions, is put it in the IRA. I assume you're young so it's not like you need to be spending on huge fixed costs. Your time horizon would make compounding work in your favor as well. But what the fuck do I know, I just know taxes. And again, your statement about net of taxes makes no sense.

>>1575561
there certainly are taxes on inherited IRAs. It is taxed as income to the beneficiary taking a distribution

>>1575561
>I just know taxes
Obviously not, if you didn't pick up on this inherited amount being tax qualified money which would be taxable as income if op takes it as income.

>>1575567
I gotta research. Not convinced

>>1575581

I'm here to help...

https://www.irs.gov/publications/p590b/ch01.html

f you inherit a traditional IRA, you are called a beneficiary. A beneficiary can be any person or entity the owner chooses to receive the benefits of the IRA after he or she dies. Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive.

>>1575567
Meh, IRA passes as a matter of property law. Not subject to estate taxes so no step up in basis. Was thinking more inline with estate taxes and gifting. I begrudgingly concede that I was wrong. And I was completely wrong.

>>1575590
Its all good. As I said above, I had to learn about them this year because I inherited one from my dad. I wanted to roll it into my existing IRA, but wasnt able to do that, because an inherited IRA keeps the characteristics of the person who it originally belonged to. which makes sense, because if that wasnt the rule, the income could effectively be deferred forever as one beneficiary died and left it to another.

>>1574553
who'd you kill?

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>>1574680
If you are 18 then you need to go ahead and take the $200k. You have to consider the time value of money. $200k today may be worth more than $250k in the future Of course it depends on how you invest it.

>>1574753
This, OP

>>1574814
>I don't know if that's how compounding interest works...
That's exactly how compounding works.

At 7% compounded, you can quickly do the calculation in your head because your account will approximately double every 10 years.

Since we're using 47 years of compounding, that means doubling about 4 and one-half times.

1. $250K > $500K
2. $500K > $1MM
3. $1MM > $2MM
4. $2MM > $4MM
4.5 $4M > $6MM

Since the guy above used 6.5% instead of 7%, his number is slightly less. But the math checks out, and it only took 30 seconds to confirm it without needing a compounding interest calculator.

>The more you know.

IRA.

Do you even have enough income to afford the property taxes and upkeep? Probably not.

>>1574887
Buying a brand new car is by far the most worthless investment you could ever make. You lose like 20% of the cars value as soon as you drive it out of the dealership for fuck sake.