What would you do with $1.5 million? (spinoff)

[summerlyangel]

Most would go to investments with an eye towards retiring early. Maybe the only things I would do immediately would be to pay off my dd's student loans and a delayed 25th anniversary trip for DH and I. We'd pull some out to pay for the younger kid's college, as needed. I'd like a newer, larger house, but since we'll probably only have 1 or 2 still at home in 5 yrs, it doesn't seem like a need as much as secure retirement does. Our mortgage is 2.125%, so no need in rushing to pay that off. No car notes or cc debt currently, but a newer car may be nice since ours are 14, 14, and 17yrs old. We are not big spenders and live simple lives, so that amount of money would absolutely be life changing for us and our kids if we invest wisely.

 

[NMBCFangirl]

I'm going to pretend this came from a lottery because we don't pay taxes on winnings.

Where I live this amount is well below the threshold for estate taxes. We already paid off our house and have robust investment accounts thanks to my being a skinflint in all things not travel related. If I came into this much as another windfall I'd be retiring early (I'm 50).

 

[NMBCFangirl]

I would refuse it if it was "above board" because I'd lose my disability benefits and health insurance. $900,000 after taxes isn't enough to gamble with that.

We had to put one of my siblings' share in the estate into a special needs trust for this very reason. He can have no direct access to it and the trustee can only use it to to pay medical expenses that are not covered by Medicare and Medical. You are correct it is not worth that gamble.

 

[hhisc16]

1. finish mortgage
2. finish car loans and student loans
3. buy more dvc
4. invest the rest

 

[JimMIA]

One of the things I think we see from this thread is that becoming a millionaire would really not be life-changing for most people. A million bucks is not as much money as many think once you start actually trying to figure out how to allocate it.

 

[White Cat]

One of the things I think we see from this thread is that becoming a millionaire would really not be life-changing for most people. A million bucks is not as much money as many think once you start actually trying to figure out how to allocate it.

Could buy and furnish any number of homes and spend it all. Only to be left with property tax, insurance and up keep.

 

[RamblingMad]

Given the pricing for Thanksgiving, I'll use it for that:

https://www.cnbc.com/2021/11/05/inf...thanksgiving-dinner-heres-how-to-prepare.html

 

[Moliphino]

One of the things I think we see from this thread is that becoming a millionaire would really not be life-changing for most people. A million bucks is not as much money as many think once you start actually trying to figure out how to allocate it.

At my age, I don't think it's enough to be able to quit my job and live comfortably for the rest of my life. Maybe if the US went for universal healthcare.

 

[White Cat]

At my age, I don't think it's enough to be able to quit my job and live comfortably for the rest of my life. Maybe if the US went for universal healthcare.

Then that money would be taxed much differently.

 

[prairie_girl]

Given the pricing for Thanksgiving, I'll use it for that:

https://www.cnbc.com/2021/11/05/inf...thanksgiving-dinner-heres-how-to-prepare.html

*American Thanksgiving.

 

[Bianca and Bernard]

I liked the other thread, interesting replies. So.....let's say you came into $1.5 million. Just fell into your lap somehow.
What would you do with it?

Don't forget to account for taxes.

Pay off debt
buy a house
put the rest away.

 

[Colleen27]

Nothing interesting. Hire out my kitchen renovation to get it done faster than DIYing it and invest the rest. Depending on the tax burden, that sum invested carefully would generate nearly enough for us to live off of in perpetuity, so as a supplement to DH's income (because no amount of money could convince him to give up his job and because we couldn't live on that amount if we were on our own for insurance) the interest would be enough to afford pretty much anything our modest little hearts might desire.

 

[Metro West]

Pay off all my bills...see what my family needed...give some to charity...travel...and just live a nice leisurely life.

 

[dvcgirl67]

Given the pricing for Thanksgiving, I'll use it for that:

https://www.cnbc.com/2021/11/05/inf...thanksgiving-dinner-heres-how-to-prepare.html

Yes, TG will be more expensive for sure. But....have to say that the jobs number looked pretty good today, and the last two months were revised upwards. I really do think a lot more people are entering the workforce as savings and/or some of the pandemic safety net programs end. We're definitely not seeing any signs of stagflation with those numbers. So...hopefully we'll see some improvement on the inflation front next year.

And while I know we're all feeling it a bit as far as inflation goes, I'm sure a lot of your are noticing that our 401k/retirement investments are looking pretty sweet....for us, the best ever. I'm expecting a correction as some point...but hoping it won't be too bad.

 

[mefordis]

Then that money would be taxed much differently.

Isn't it already taxed at almost half? I'm thinking lotto winnings in the US.

 

[Neapolitan Ice Cream]

Buy a place in La Manga Club, Spain, get a Spanish passport, move out there, work on some music, get a minor job to lengthen my funds and just enjoy life

 

[White Cat]

Buy a place in La Manga Club, Spain, get a Spanish passport, move out there, work on some music, get a minor job to lengthen my funds and just enjoy life
[/QUOTE
That will be much more difficult to do than you might think. Unless

Buy a place in La Manga Club, Spain, get a Spanish passport, move out there, work on some music, get a minor job to lengthen my funds and just enjoy life

Much more difficult and complicated than you might think.

 

[JimMIA]

Isn't it already taxed at almost half? I'm thinking lotto winnings in the US.

It depends on where you live, and also how you take the winnings.

If you take the cash payout, which most people do, at a minimum they withhold 24% for the IRS. You will owe much more than that unless you do something to reduce your tax bill, but that's the minimum.

If your state has a state income tax, they will also withhold some to cover that.

You can find the tax information online with a simple Google search.

 

[mefordis]

It depends on where you live, and also how you take the winnings.

If you take the cash payout, which most people do, at a minimum they withhold 24% for the IRS. You will owe much more than that unless you do something to reduce your tax bill, but that's the minimum.

If your state has a state income tax, they will also withhold some to cover that.

You can find the tax information online with a simple Google search.

One of the worst states for taxes on lotto winnings is NY. 25% federal, 8.82% state. Assuming 1.5 million payout, you give up $507,300 and get to keep $992,700 .

https://blog.taxact.com/lottery-tax-calculator/

 

[JimMIA]

One of the worst states for taxes on lotto winnings is NY. 25% federal, 8.82% state. Assuming 1.5 million payout, you give up $507,300 and get to keep $992,700 .

Yeah, but don't think you are done with the IRS. The actual income tax on that much is WAY more than 25%. That's where you need some smart lawyer and CPA help.