An inheritance presents many opportunities, including paying off outstanding bills and investing the money wisely. Making the right investments can grow your inheritance, as opposed to merely socking the money away in a savings account where it will collect little more than dust. Here are a few ways you can grow your wealth so it continues to serve you well in the future.

What Should You Do With Your Inheritance Money?

1. Place It in a Retirement Account

It’s smart to use retirement accounts, such as 401(k)s and IRAs, because they offer tax advantages. For instance, all contributions to a 401(k) are pretax, so you can lower your taxable income for the year by deducting contributions made during that time. Also, earnings that accumulate in your 401(k) are tax deferred, meaning you don’t pay taxes on the money until you withdraw it.

2. Invest in the Stock Market

Retirement accounts offer low-risk methods of investing. However, low-risk often means low-reward, which is why many people in receipt of inheritances are willing to put at least a portion of their money into stocks.

This is a long-term strategy for building wealth; your investment will continue to grow, provided you make the right decisions when it comes to buying and selling stocks. Many investors choose to work with financial advisers when they lack knowledge about the stock market because these experienced experts can help guide your decisions.

3. Buy a Home

Consider putting a down payment on a house with the money from your inheritance. As you make mortgage payments, the equity you have in your home will build. You can borrow against this equity in the future or continue to make payments until you pay off the house completely. At that point, you can choose to sell it or keep it to bequeath to family members.

Headwaters Investment Counsel & Asset Management helps clients in Willoughby, OH, make smart decisions about their money. If you’re interested in investing in the stock market, these financial advisers use a proven strategy to forecast stock potential and apply these principles to your investment portfolio. Their approach will continue to serve your needs, even when the market isn’t favorable. Call (440) 399-3359 to schedule an appointment, and visit the website to explore their services.