Is it better to use inheritance to pay down the mortgage or to put it in the market for retirement?
Thank you in advance!
Some background. I am going to inherit about 200k from life insurance from my father soon. My wife and I are early and mid 30s respectively, with our first child on the way.
We live in a mcol area and, other than our house and 1 small student loan, we have no debt. We just bought a house last year with a mortgage of around 450k at 4.8%.
We both have advanced degrees and really only got up and running the last few years, but we are now making around 200k annually and have around 100k in savings between the two of us, mostly in 401ks.
I have run the numbers and putting all the inheritance towards the house would cut it down significantly. But at the same time, if I invested it in the market it would grow into a nice nest egg for our retirement over the next 30 years. I have read a lot about the 5% rule, but with our mortgage so close to it, im not sure which way to go. What would you do in our shoes?