Advice for a college student interested in investment opportunities.
2.5 years is a short period in the stock market. That means there is a significant chance it will be lower in 2.5 years, whereas it is very likely to be higher over a longer time period like 5-10 years. So if you want the funds to grow for sure then consider an online savings account, where you might earn 1-2%.  If you want to do stocks anyway, but don't have any idea what fund to buy, the safest default choice is to buy an index fund that tracks the S&P 500. Vanguard's VFINX is one example. "Put it in a Vanguard fund with 80% VTI and 20% VXUS. That's what you'll let set for 10-15 years. For somebody that is totally new to investing, use ""play money"" in the stock market. It's easy for young people to get dreams of glory and blow it all on some stock tip they've seen on Twitter." Over a period of time most mutual funds do not perform better that an index fund.  Picking and buying individual stock can be a great learning experience.
It'd be interesting to break it out by first-generation college students vs. student's whose parents and immediate family also graduated from college.  Oh, also this is looking at students who graduated in '04, and it's well known that the recession hit black people way harder than everyone else (see employment rates). I can see those two things having linked effects. "As the article states, traditionally, it's a majority percentage of teens and immigrants. Makes sense. My wife and I regularly volunteer with immigrants, some documented and some not, to assist in finding jobs and housing, so that still holds true.   But, add to that the newer college grads who struggle to find ANY job.   I don't have a perfect solution. I think most people pretend their agenda is the perfect solution. So if the research shows--and it does--that mandated minimum wage raise eliminates jobs, the solution lies elsewhere. As far as ""livable wage"" goes, that is partly determined by situation and partly by individual. Obviously, the individual has to be responsible for their share (frugality, minimizing debt, work ethic, etc). But what's not in their control could be helped on a situation to situation basis. What I mean is ""disadvantaged people"" needs to be defined before you can help them. If ""disadvantage people"" means ""recently graduated students"", then minimize their biggest financial burden of school loan interest rates. If it's lower-skilled workers like teens and SOME immigrants, get rid of the minimum wage and allow them to work those lower paying jobs while gaining experience. So on and so forth.   As a business owner who makes around $30/hour, I can tell you I CAN'T afford to hire help at $19/hour to do simple tasks that would make me more productive. That killed a job right there. And it prevented me from freeing up my time to focus MORE on income-generating work, so I'm poorer for it too. As someone who volunteers with immigrants, I can't tell you how happy the people I've worked with would be to have more job opportunities." "What is my best bet with the 401K? I know very little about retirement   plans and don't plan to ever touch this money until I retire but could   this money be of better use somewhere else? If you don't know your options, I would suggest reading some material on it that might be a little more extensive than an answer here (for instance, http://www.getrichslowly.org/blog/ has some good and free information about a myriad of financial topics).  With retirement accounts you can roll it over or leave it in the current account.  Things to look at would be costs of the accounts, options you have in each account, and the flexibility of moving it if you need to.  Depending on what type of retirement account it is (Roth 401K, Traditional 401K, etc, you may have some advantages with moving it to another type). The student loans.... pay them off in one shot? I have the extra money   and it would not be a hardship to do so unless that money can be best   used somewhere else? Unless I was making more money in a savings/investing/business opportunity, I would pay off the student loans in a lump sum.  The reason is basic opportunity cost (economics) - if a better opportunity isn't on the horizon with your money, kill the interest you're paying because it's money you're losing every month. With the money just sitting in the bank I get a little sick feeling   thinking that I can be doing something better with that. Outside of general savings you could look at investing in stocks, ETFs, mutual funds, currencies, lending club loans (vary by state), or something similar.  Or you could try to start a business or invest in a start up directly (though, depending on the start up, they may not accept small investors).  Otherwise, if you don't have a specific idea at this time, it's best to have money in savings while you ponder where else it would serve you. Keep in mind, having cash on hand, even if it's not earning anything, can bail you out in emergencies or open the door if an opportunity arises.  So, you're really not ""losing"" anything by having it in cash if you're patiently waiting on opportunities." "First, I would recommend getting rid of this ridiculous debt, or remember this day and this answer, ""you will be living this way for many years to come and maybe worse, no/not enough retirement"".  Hold off on any retirement savings right now so that the money can be used to crush this debt. Without knowing all of your specifics (health insurance deductions, etc.) and without any retirement contribution, given $190,000 you should probably be taking home around $12,000 per month total.  Assuming a $2,000 mortgage payment (30 year term), that is $10,000 left per month.  If you were serious about paying this off, you could easily live off of $3,000 per month (probably less) and have $7,000 left to throw at the student loan debt.  This assumes that you haven't financed automobiles, especially expensive ones or have other significant debt payments. That's around 3 years until the entire $300,000 is paid! I have personally used and endorse the snowball method (pay off smallest to largest regardless of interest rate), though I did adjust it slightly to pay off some debts first that had a very high monthly payment so that I would then have this large payment to throw at the next debt. After the debt is gone, you now have the extra $7,000 per month (probably more if you get raises, bonuses etc.) to enjoy and start saving for retirement and kid's college.  You may have 20-25 years to save for retirement; at $4,000 per month that's $1 million in just savings, not including the growth (with moderate growth this could easily double or more).  You'll also have about 14 years to save for college for this one kid; at $1,500 per month that's $250,000 (not including investment growth). This is probably overkill for one kid, so adjust accordingly. Then there's at least $1,500 per month left to pay off the mortgage in less than half the time of the original term! So in this scenario, conservatively you might have: Obviously I don't know your financials or circumstances, so build a good budget and play with the numbers.  If you sacrifice for a short time you'll be way better off, trust me from experience. As a side note:  Assuming the loan debt is 50/50 you and your husband, you made a good investment and he made a poor one.  Unless he is a public defender or charity attorney, why is he making $60,000 when you are both attorneys and both have huge student loan debt?  If it were me, I would consider a job change.  At least until the debt was cleaned up.  If he can make $100,000 to $130,000 or more, then your debt may be gone in under 2 years!  Then he can go back to the charity gig." If you want to invest in stocks, bonds and mutual funds I would suggest you take a portion of your inheritance and use it to learn how to invest in this asset class wisely. Take courses on investing and trading (two different things) in paper assets and start trading on a fantasy exchange to test and hone your investment skills before risking any of your money. Personally I don't find bonds to have a meaningful rate of return and I prefer stocks that have a dividend over those that don't. Parking some of your money in an IRA is a good strategy for when you do not see opportunities to purchase cashflow-positive assets right away; this allows you to wait and deploy your capital when the opportunity presents itself and to educate yourself on what a good opportunity looks like. I recommend that people think for themselves and get a multitude of counselors.  The more you understand about what drives the prices of various assets, the better. Getting to good advice for a particular person depends on the financial picture for that person.  For example, if they have a lot of consumer debt, then they probably would be better off paying off the debt before investing, as earning 5% (say) in the stock market year over year will be eaten up by the 18%+ they may be paying on their credit cards. Here's a starter list of the types of information that would be better to have in order to get fair investment advice. "Two things to consider: When it comes to advice, don't be ""Penny wise and Pound foolish"". It is an ongoing debate whether active management vs passive indexes are a better choice, and I am sure others can give good arguments for both sides. I look at it as you are paying for advice. If your adviser will teach you about investing and serve your interests, having his advise will probably prevent you from making some dumb mistakes. A few mistakes (such as jumping in/out of markets based on fear/speculation) can eliminate any savings in fees. However, if you feel confident that you have the resources and can make good decisions, why pay for advise you don't need? EDIT In this case, my opinion is that you don't need a complex plan at this time. The money you would spend on financial advise would not be the best use of the funds.  That said, to your main question, I would delay making any long-term decisions with these funds until you know you are done with your education and on an established career path. This period of your life can be very volatile, and you may find yourself halfway through college and wanting to change majors or start a different path. Give yourself the option to do that by deferring long-term investment decisions until you have more stability. For that reason, I would avoid focusing on retirement savings. As others point out, you are limited in how much you can contribute per year. If you want to start, ROTH is your best bet, but if you put it in don't pull it out. That is a bad habit to get into. Personal finance is as much about developing habits as it is doing math... A low-turnover index fund may be appropriate, but you don't want to end up where you want to buy a house or start a business and your investment has just lost 10%...  I would keep at least half in a liquid, safe account until after graduation. Any debt you incur because you tied up this money will eliminate any investment gains (if any). Good Luck! EDITED to clarify retirement savings" You should check out existing resources like Investopedia for definitions, and ask questions if there is something you do not understand, instead of asking folks to spit out definitions. A good book for you to read might be Wall Street Words