Should I invest my inheritance in my 401k or settle down the principal of my home loan?
Answers:
Depends on the rate of your home loan, and the rate you enjoy be getting on your 401K -- Compare them, and don't forget the the interest you settle up on your home loan is due deductible
401(k) are funded through your employer. You won't be capable of directly invest your inheritance in the 401(k), you can lone boost your contribution (and/or affix a "ambush up amount" if you're over 50). 401(k)s also own a contribution hold back respectively year. For 2007 it's $15,500.
You could contribute to a Roth IRA, but that also have a every twelve months contribution mark out ($4k if you're beneath 50, $5k if you're 50 and above).
Paying down the principal of your mortgage, while seemingly advantageous, in truth does hold disadvantages. Keep within mind that the interest you settle on it is deductible from your gross income, reducing your import tax burden. If you hold a fair interest rate, and an affordable fee, you might be better bad newly investing the money. If the size of the inheritance is substantial, I would recommend consulting a certified financial planner. He or she will be capable of present within greater detail the different option you hold, and the benefits and drawbacks of respectively.
Pay down principal! But that's simply me, zilch pays more than individual debt free.