‘This feels like an opportunity’: I’m 55, earn $78,000 and have no kids. My mother gave me $10,000. What should I do?

Financial Situation Overview - The individual has a retirement fund in good shape but had to reduce contributions due to rising costs [2] - Current income is $78,000 annually, with a mortgage balance of $60,000 at a 3% interest rate and a car loan of $15,000 at an 8% interest rate [1][2] Debt Management Strategy - The $10,000 gift presents an opportunity to pay down debt, particularly the car loan and credit card debt [4] - Paying off the 8% car loan is equivalent to earning a risk-free 8% return, making it a financially sound decision [4] Recommended Financial Actions - Suggested actions include: 1. Paying off the $1,000 credit card debt [5] 2. Paying off at least $5,000 of the car loan [5] 3. Doubling emergency savings to $4,000 [5] 4. Increasing 401(k) contributions without depleting cash reserves [5] Retirement Contribution Insights - It is advised to re-evaluate the 401(k) allocation to ensure it aligns with risk tolerance and to maximize contributions, especially for those over 50 [6] - For 2025, the employee contribution limit is $23,500, with a catch-up contribution of $7,500 for individuals aged 50 and above, expected to rise to $8,000 next year [7]