Windfall Game Plan

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Topic Author
Troutmask
Posts: 5
Joined: Tue Sep 20, 2022 11:12 am

Windfall Game Plan

Post by Troutmask »

I'm a divorced early-50s Washington state male and recently received a windfall of $150k and am trying to determine how to best invest it. I have about $200k in IRAs in my Schwab retirement account and don’t want to invest my windfall in the marketplace given the current volatility. Of this $150k, I want to use $50k of it to help fund my two kids’ college education over the next four years. They’re both freshmen this year and are each taking the max federal student loan of $5,500 per year and my ex and I have agreed to split the balance between us. The remaining $100k I want to use as my “nest egg” by putting it into a no-risk interest-yielding fund(s). I’ll need to begin accessing the $50k in January for university expenses and I don’t anticipate needing to access the $100k for more than three years. Beyond this windfall I currently have enough in my bank money market to provide for a six-month emergency fund and my stream of employment income is more than enough to cover my monthly $1,200 mortgage (3.125%) and monthly expenses (I have no other debt). I would prefer to position this $150k into Schwab products for portfolio convenience unless there is a reason otherwise. Here’s what I’m thinking:

*Place the $50k that I will begin needing in January into a 4-month CD that will earn approximately 4% interest.
*Place the $150k that I won’t need for a while into an 18-month treasury bond that will earn approximately 4.15% interest.

To execute this plan I’m going to have to initiate an online transfer of funds from my bank to my Schwab brokerage and am extremely nervous about moving such a large sum of money, any safeguards I should take in doing this? Beyond that, does this sound like a good overall strategy?
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Sandtrap
Posts: 17200
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Windfall Game Plan

Post by Sandtrap »

Troutmask wrote: Thu Sep 22, 2022 2:28 pm I'm a divorced early-50s Washington state male and recently received a windfall of $150k and am trying to determine how to best invest it. I have about $200k in IRAs in my Schwab retirement account and don’t want to invest my windfall in the marketplace given the current volatility. Of this $150k, I want to use $50k of it to help fund my two kids’ college education over the next four years. They’re both freshmen this year and are each taking the max federal student loan of $5,500 per year and my ex and I have agreed to split the balance between us. The remaining $100k I want to use as my “nest egg” by putting it into a no-risk interest-yielding fund(s). I’ll need to begin accessing the $50k in January for university expenses and I don’t anticipate needing to access the $100k for more than three years. Beyond this windfall I currently have enough in my bank money market to provide for a six-month emergency fund and my stream of employment income is more than enough to cover my monthly $1,200 mortgage (3.125%) and monthly expenses (I have no other debt). I would prefer to position this $150k into Schwab products for portfolio convenience unless there is a reason otherwise. Here’s what I’m thinking:

*Place the $50k that I will begin needing in January into a 4-month CD that will earn approximately 4% interest.
*Place the $150k that I won’t need for a while into an 18-month treasury bond that will earn approximately 4.15% interest.

To execute this plan I’m going to have to initiate an online transfer of funds from my bank to my Schwab brokerage and am extremely nervous about moving such a large sum of money, any safeguards I should take in doing this? Beyond that, does this sound like a good overall strategy?
1
Good well thought out plan that "works for you" and "your concerns", and many might do other things, etc, but this seems very well thought out by yourself, "and will work for Your Concerns. Great job!
2
Setup ACA transfer link protocols between Schwab and your local bank. (either yourself or if trust then trust account to trust account).
Do a "pull" or a "push" from the Schwab Account (initiate the transaction from there, not the bank).
Talk to your Schwab rep if you have security concerns, if you have 2 factor id etc, other security protocols in place.
For the timing, check with your Shwab rep and your bank on ACA transfer times.

j :D
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Topic Author
Troutmask
Posts: 5
Joined: Tue Sep 20, 2022 11:12 am

Re: Windfall Game Plan

Post by Troutmask »


Good well thought out plan that "works for you" and "your concerns", and many might do other things, etc, but this seems very well thought out by yourself, "and will work for Your Concerns. Great job!
Thank you, I appreciate your comments. I've done internal transfers between my bank and Schwab before, so I think I might do three transfers of $50k each just to put my mind at ease.
colddeadfish
Posts: 225
Joined: Sun Apr 23, 2017 1:30 pm

Re: Windfall Game Plan

Post by colddeadfish »

OP, I understand your concern! Your plan is good and everything will be fine. I have wire transferred twice that amount and called several times to confirm that it went through. Check with all parties as many times as you feel the need.
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