Where to invest lump sum

Are you wanting to put it towards retirement? How much is the lump sum? Are you going to need it or any of it in the near future?

People will need to know those answers and probably others before helping.

Are you maxing 401k? Have an ira, if so maxing it?

If you want to put it towards retirement and aren't maxing those then that'll be your best option. Have an emergency fund already?

Fidelity
Dump it all into FXAIX

Just like NA stated, you need to really define what/when you want or will need this money. Do you want something taxed advantage?

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Open a Vanguard or Fidelity account. You can set up both an ordinary investment account and a Roth IRA in it, and you can contribute to the Roth in addition to your 401k if you otherwise qualify (don't exceed income limits).

Max out a Roth in a S&P 500 Index fund, and put the rest in similar taxable index fund. Are you married with a spouse who has income? If so, open an account and a Roth for them as well so you can double the annual contribution limit. Every year, as long as you qualify, make the max contribution(s) to the Roth(s). Otherwise, ignore it for the next few decades.

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If he wants to use it for retirement, this sounds close to what I would recommend. But I wouldn't say definitely Roth, that's really going to depend on his income limits and what tax bracket he thinks he will be in when he retires compared to now. He may want to do a traditional instead.



Here is what I did when I received a lump sum OP.

At the time I wasn't able to or maxing my 401k or IRA. I wanted to shuffle the money into retirement funds.

So, I set my 401k to max out for the year (putting it in S&P index fund or ETF like VOO or FXAIX because I had about 20 years to retire). Basically, shuffling my paycheck into the 401k and using my lump sum to make up for living expenses since a larger portion of my paycheck was going to my 401k.

Then I did a traditonal IRA instead of a Roth because I expected to be in a lower tax bracket when I retired than I was then. If you are young and in relatively low tax bracket now, and expect to be drawing more to live off when you retire then the Roth would make more sense. After putting in the max for the IRA for the year I put those funds in a S&P index fund as well and set the dividends and gains to reinvest in it.

Since they were already taxed funds, I reported I put x amount in a Traditonal IRA when doing my taxes for that year, so the taxes that were taken out on them were returned in my tax return.

I also did what the previous poster suggested and did the same thing with my wife's 401k and an IRA.

This was the quickest way I found to get the money into a retirement investmet account and out of my HYSA. Basically shuffling it into our 401k and IRAs.

And I just did that until the money was in. Then set my 401k contribution back to what I wanted it at normally.

This will work if you want it for retirement and aren't already maxing 401k and IRA contributions, but if you are then you'll probably want to get advice from someone besides me.