southerngirl wrote: Wed Oct 08, 2025 3:56 pm
Single, Divorce, Age 46.I’m coming into a 100K windfall at the end of the month due to death of my ex-husband, and trying to understand what my best options are, or if there are options I haven’t considered.
Income:
- Salary is 90K.
- 4K yearly bonus
- Another ~70K in RSUs received yearly. These are cashed out as soon a they vest
Retirement:
- Company has a 401K match, .5% of the first 3%
- Currently contributing 5% into 401K Roth
- Mega backdoor Roth is available, but my understanding is to use it, I need to max out my 401K contributions
- My MAGI is too high to put money into Roth IRA
Assets:
- 38K in Roth IRA
- 115K in 401K, mostly Roth
- 40K spread across FZFXX (money market, cash sweep), BRKB, FZDXX and PLTR. The bulk is in FZFXX & FZDXX.
- 320K House
[*]2021 vehicle valued at 28K
Debts:
- 255K Mortgage @ 6.125%
- 13K Student Loans @ <2% interest, deferred until December 2026
Option 1:
- 45K towards mortgage (this saves me about 151K in interest over the life of the loan)
- 5K towards a hydrotherapy tub or hot tub
- Balance to emergency fund held in MM
Option 2:
- Nothing towards the mortgage, wait until rates to fall
- 5K towards a hydrotherapy tub or hot tub
- Increase 401K contributions back to 20%. I had them at this level prior to purchasing my house in May. It looks like I can go as high as 100% though if I want.
- Balance to make up for what’s going into the 401K, held in MM
I’m not in a great spot for retirement and this worries me. My ex-husband’s philosophy was money was there to be spent and room on the credit card meant it could be afforded. However, the current economy also worries me, as Covid showed us, 6 months worth of income in savings may easily not be enough if you lose your job.
This is what I’ve accomplished in 8 years, going from 30K in debt at the time of our divorce
Assets
House: $320,000
401k: $115,000
Roth IRA: $38,000
Taxable: $40,000
Car: $28,000
Total: $541,000
Liabilities
-$255,000 mortgage
-$13,000 student loan
Total: -$268,000
NW: $273,000
That’s before the incoming $100,000 windfall which will bump your NW up to $373,000. That’s a nice climb out of your post-divorce beginnings at -$30,000. Kudos!
Questions: With your current annual income + bonus + RSUs for a total of $164,000, why are you only contributing 5% into your 401k? How do your expenses compare to your income? Is there any room (before any consideration of the windfall) for you to be able to be saving more than you are for retirement? Say 15-20% as a base rate of savings?
Although you are in good shape compared to a lot of the population, you have a window of opportunity to really sock away some of your income (provided your expenses are all in line to allow you to do that) to play some catch up.
Catch up? Yes.
Using multiples of income as a starting point for retiring at or near FRA, here is what Fidelity suggests you should have saved by this point…
4 X your $90K salary is $360,000. You currently have $193,000 saved + the $100,000 coming windfall will take you to $293,000 which is still a shortfall based on Fidelity’s multiples of income guidance.
If we add your bonus and RSUs to your salary which is your full pay package, you should have 4 X $164,000 saved by now which is $656,000. Even with the coming windfall, you are $363,00 below the climb up the hill to the retirement phase. Obviously, we use these suggested milestones – be it multiples of salary, 25X expenses, etc. – as guideposts. However, they are thought out and based on retiring in the range of FRA + combined with taking Social Security at FRA to cover your expenses in retirement.
Although you’ve done a great job digging yourself out of a hole, now is crunch time for you to tighten the screws and turn as much of your human capital into financial capital that you can to secure your future.
CyclingDuo
