I once heard a story about an 18-year-old boy who won $1.5 million in the lottery… and spent it all in just three months. It’s a big reminder that receiving a large amount of money—whether through lottery or inheritance—can be a blessing or a curse, depending on how you manage it.

Over the years, I’ve helped clients who received inheritances ranging from $40,000 to over $3 million. Some used it to completely transform their financial lives. Others… not so much.

So today, I want to share how you can use an inheritance wisely, depending on your life stage.

In Your 20s: Build Habits, Not Just Wealth

When you’re young, it can be tempting to spend money quickly. But your 20s are actually the best time to lay the foundation for lifelong wealth.

Here’s what I suggest:

• Clear bad debt first – such as credit cards or personal loans. Getting rid of these debts will free up your future income and reduce stress.
• Travel intentionally – Yes, I do recommend using some of the inheritance to see the world. The personal growth and experiences you gain in your 20s can shape your mindset and confidence in ways that are very different from travelling in your 30s or 40s.
• Start investing early – Even a small amount can go a long way when invested early. I often recommend starting with diversified, low-cost options like index funds or ETFs. The earlier you start, the more compound interest works in your favour.

✅ Client story: Angie, in her mid-20s, received $120,000 from her grandfather. We used $20,000 to clear her car loan and credit card debt, allocated $20,000 for travel, and invested the rest in an index fund. Ten years later, that investment has grown significantly—and she’s grateful she didn’t spend it all at once.

In Your 30s: Create Stability for the Future

By your 30s, you may be starting a family or progressing in your career. Your priorities shift—and so should your financial decisions.

Smart steps include:

• Buy your first home – A lump sum inheritance can help you get into the property market sooner, either by funding a deposit or reducing the size of your home loan.
• Plan for your kids’ education – School and university costs are rising. Putting some money aside now in a dedicated education fund or investment account can give you peace of mind later.
• Continue investing – Keep building your portfolio alongside your other goals. Remember: investing isn’t only for the wealthy—it’s how people become wealthy.

✅ Client story: Tim and Leanne, a couple in their early 30s, received a $200,000 inheritance. We used $150,000 for their home deposit and allocated $50,000 to an education bond, which gives them good tax benefits over the years for their baby daughter.

In Your 40s: Accelerate Growth

This is often your highest income-earning decade, and if you receive an inheritance, you can use it to supercharge your finances.

Here’s how:

• Pay down your mortgage – Freeing yourself from home loan repayments earlier gives you more freedom and flexibility.
• Use debt recycling – This is a strategy where you gradually convert non-deductible home loan debt into tax-deductible investment debt. It’s a powerful way to grow wealth much faster using borrowed funds wisely.
• Expand your investment portfolio – This is a good time to diversify into shares, managed funds, or investment property to build passive income.

✅ Client story: Paul and Wendy used a $400,000 inheritance to pay off part of their mortgage, then borrowed back $200,000 under a debt recycling strategy. That $200,000 is now invested in a diversified portfolio and generating returns while reducing their taxable income.

In Your 50s: Prepare for Freedom

Your 50s are the ideal time to shift focus from growing wealth to protecting it—and planning for retirement.

Key moves:

• Top up your super – Use strategies like concessional and non-concessional contributions to boost your super balance. Depending on your situation, you might even benefit from government co-contributions or tax deductions.
• Create an exit plan – Think about when you want to retire and what lifestyle you want. Inheritance can help fund those goals or even bring your retirement date forward.
• Review your insurance and estate plans – Make sure everything is structured to protect your wealth and support your loved ones.

✅ Client story: Bob, 56, received a $700,000 inheritance. He paid off all his debts, including his home loan and investment loan, and contributed $360,000 to his super fund. He is now considering retiring at age 60—five years earlier than originally planned.

In Your 60s: Maximise the Tax-Free Benefits

If you’re already retired, an inheritance can still add significant value—especially if used wisely within the superannuation system.

Here’s what I suggest:

• Contribute into your pension account – If you’re eligible, you can move some or all of your inheritance into a retirement phase pension account, where both the income and investment returns are completely tax-free—up to $2 million per person.
• Use it to support lifestyle or aged care needs – Whether it’s travel, hobbies, or healthcare, this is your time to enjoy the fruits of your labour and legacy.
• Gift with purpose – Many parents choose to help their children or grandchildren now, instead of waiting decades to pass on wealth.

✅ Client story: Craig and Linda, in their late 60s, received over $1.1 million in inheritance. After setting aside some funds for travel, we contributed $700,000 to their retirement fund—split between their individual superannuation pension accounts. This strategy allowed them to enjoy tax-free income and investment returns. They also gifted $200,000 to each of their two children to help them buy their first homes. Why wait 30 more years, when your kids will be in their 60s themselves before inheriting from you? Gifting now—when they actually need the help—can make a huge difference.

Whether you inherit $40,000 or $3 million, remember this: inheritance is not a solution to all your problems—it’s a tool. And like any tool, it needs to be used with intention, planning, and a long-term mindset.

Used wisely, inheritance can help you create financial freedom, protect your family, and even change the next generation’s future.

If you’ve received—or are expecting to receive—an inheritance and want to make the most of it, I’d love to help you explore the smartest strategies for your life stage.