Near-term
Taxes, a house down payment, tuition, a vehicle, planned renovations or another goal within the next few years.
New Money / Windfall
You suddenly have money to invest. Now what?
Inheritance, a bonus, business-sale proceeds, settlement money, stock compensation or another lump sum can create pressure to “do something” immediately. Terra starts one step earlier: decide what the money is for, what rules attach to it, and which part is actually long-term investment money.
Reviewed · Aug 14, 2026
First principle
The fund choice is not the first decision.
A large lump sum can affect cash reserves, debt, retirement contributions, taxes, near-term goals and whether professional planning is worth paying for.
1
Identify exactly what you received
Cash is different from inherited securities. An inherited retirement account is different again. Before selling or moving inherited assets, understand the account type, beneficiary paperwork, and tax/basis information attached to them.
Inherited stocks or funds? Read this before you sell →2
Give yourself permission not to invest it tomorrow
A thoughtful pause can be productive. Keep near-term obligations and money you may need soon separate from the portion you truly intend to invest for years.
3
Put a time horizon on each dollar
Money for a home purchase in two years should not automatically be treated like money intended for retirement decades from now. Time horizon changes the amount of market risk a goal can reasonably tolerate.
4
Check the financial foundation
Review emergency reserves, high-interest debt, insurance needs and known large expenses before treating the whole lump sum as investable capital.
5
Choose the account before the investment
A taxable brokerage account can accept large deposits, but retirement accounts have contribution and eligibility rules. A 401(k) is generally funded through employee compensation deferrals, and IRA contributions are limited and tied to taxable compensation rules. A windfall may still change how aggressively you save from future paychecks.
6
Decide what kind of help you want
A one-time planning engagement and ongoing asset management are not the same service. If the problem is “help me make a plan for this one transition,” compare that with paying a percentage of assets every year.
Goal buckets
One $200,000 windfall can contain several different jobs.
Terra does not prescribe allocations. It separates goals so you do not accidentally invest short-term money as if it were retirement money.
Flexible / medium-term
Money without an immediate spending date but that you may want available before retirement.
Long-term
Money you can leave invested through normal market declines because the goal is many years away.
Build my Terra new-money path
This is a routing tool, not an allocation recommendation. Fill in the questions, then click Build My Next Steps. On a wide screen your results appear to the right; on a narrower browser window they appear below this form.
House, tuition, tax payment, major purchase, etc.
Complete or change the questions above, then press the button.
What records should I gather?
Know what you have before you move it.
Terra does not need these documents uploaded. The point is to know what information may matter before making irreversible moves.
Inheritance / estate paperwork
What asset or cash was transferred, and from which account or estate?
What asset or cash was transferred, and from which account or estate?
Brokerage statements and basis information
Especially important if you inherited securities rather than cash.
Especially important if you inherited securities rather than cash.
Your current 401(k) plan and fund list
Match, contribution rate, fund expenses and existing allocation.
Match, contribution rate, fund expenses and existing allocation.
Debt and cash-reserve picture
Balances, rates, monthly needs and major upcoming expenses.
Balances, rates, monthly needs and major upcoming expenses.
Your tax professional's prior return / estimates
Useful if a large taxable account will change dividends, gains or estimated taxes.
Useful if a large taxable account will change dividends, gains or estimated taxes.
Questions for an advisor
One-time plan or ongoing management? Fee structure? Custody? Tax coordination? What exactly are you paying for?
One-time plan or ongoing management? Fee structure? Custody? Tax coordination? What exactly are you paying for?
Where Terra takes you next
Turn the windfall into smaller, answerable questions.
Planning a New Taxable Investment
Model hypothetical taxable income, distributions and gains before you have a prior-year 1099.
Advisor True-Cost
Compare an ongoing percentage-of-assets relationship with a flat-fee or lower-cost alternative under your own assumptions.
401(k) Reality Check
Review your workplace fund choices and expenses while deciding how the new money fits alongside retirement savings.
Official-source notes for inheritance and lump sums
For federal income-tax purposes, IRS guidance says property received by gift, bequest or inheritance generally is not included in the recipient's income, but income later produced by that property can be taxable. Selling inherited property can require determining its tax basis, which is why inherited securities deserve special care before sale.
Retirement accounts also have their own contribution and beneficiary rules. Terra intentionally does not turn those rules into a one-size-fits-all recommendation. Verify current IRS rules or use an appropriate tax professional when the amounts are material.
Sources: IRS Publication 559; IRS Gifts & Inheritances FAQ; IRS IRA contribution limits; IRS 401(k) topic; Investor.gov lump-sum guidance.