MW I'm 37 and won a settlement. I maxed out my IRA. How do I invest the $21,000 I have left?
By Aditi Shrikant
'I would love for this money to buy me some more freedom - it's just sitting in my savings account'
"Young womanThis feels like a lot of money, but at the same time, not enough to make a big life change or invest in real estate."
Dear Dollar Signs,
I recently came into $36,000 from a settlement with a former employer. I freelance and have been traveling more over the past year, so I know I could easily spend that money on travel. But I also feel like I should do something more with it.
I haven't saved much for retirement over the past few years, so I immediately maxed out my IRA contribution for 2025 and plan to max out my IRA contribution for 2026 as well. That leaves me with about $21,000.
I'm 37 and don't own real estate. I don't have any debt and am on track to make $100,000 this year. This feels like a lot of money, but at the same time, not enough to make a big life change or invest in real estate.
Mostly, I would love for this money to buy me some more freedom. For now, it's just sitting in my savings account. What should I do?
Kind of Blessed
If you're just starting out on your money or career journey and have questions about how to navigate your finances, we want to hear from you. Write to Dollar Signs, MarketWatch's new advice column, at dollarsigns@marketwatch.com.
Dear Blessed,
This is so exciting! And while so many people out there would love to find themselves with an extra $21,000, I understand your conundrum. It's not enough to spark a change in your financial well-being or career, but it's a lot of money - enough to significantly improve your situation.
You'll still need to work. Real estate, as you said, is probably off the table, seeing as the median down payment on a home clocks in at $62,000, according to Bankrate. But it's also a good chunk of that average downpayment, so never give up hope of getting on the property ladder.
You've already made some smart decisions by maxing out your IRA contributions for both this year and last year. It sounds like you're pretty money-savvy, so it's likely that you already have an emergency fund.
Still, it might be worth bolstering that reserve. An emergency savings account should contain at least six months' worth of expenses (some economists say a year). Maybe add one or two more months' worth of rent and bills, just in case.
If those bases are covered, you can have some fun - or buy yourself some security - with this money. And if you want to invest, you have a few smart options that could actually be somewhat life-changing.
Invest wisely
Over the past 30 years, the S&P 500's compound annual growth rate, with dividends reinvested, has been 10%, according to data provided by LSEG. At this rate of return, if you invest the $21,000, you'd have $54,966 in 10 years, and $143,868 after 20 years.
Let's say that, on top of investing $21,000, you contributed another $100 a month into your index fund. Starting with $21,000 and adding $1,200 a year, you would have $74,180 after 10 years and $213,380 after 20 years.
Because you are on track to earn $100,000, an extra $100 a month is feasible. And if you automate this contribution, you won't even have to think about it. (Keep in mind, however, that market returns are never guaranteed.)
You could put some of this money in a growth mutual fund, says Mark La Spisa, a certified financial planner and president of Vermillion Financial Advisors in Barrington, Ill. This is a portfolio that invests in companies expected to experience faster sales and earnings growth.
These investments are higher risk and can come with high fees, but they can appreciate faster - about five to 10 years. "She is young and has at least 28 years until normal retirement," he says. "It gives her the opportunity to get used to fluctuations."
Because you freelance, La Spisa also suggests putting at least some of this settlement into a Self Employed Pension (SEP) Plan. Annual contribution limits for 2026 are 25% of a person's income or $72,000. You can also open a Solo 401(k), or one-participant 401(k), which is when you, as opposed to a company, set up the retirement account. Annual contribution limits for 2026 are $24,500.
Why not travel?
There's also nothing wrong with putting this money toward travel if you are happy with your retirement and savings accounts, says Larry Pon, a CPA in Redwood City, Calif. "This extra money is earmarked for travel," he says.
"You don't want to get obsessed with the idea of, 'I want to make as much money as I can with my money,'" he says. "If that's what your personal goals are and your personal philosophy, then travel." Maybe allocate $5,000 for "fun money."
Perhaps this money could simply make your travels more comfortable. Now you can splurge on nicer meals or a pricier hotel.
The fact that you're earning $100,000 freelancing is extremely impressive. Not having set hours or a boss can feel freeing. When I was freelancing, though, the stress of making ends meet meant I was saying "yes" to a lot of projects and working well over 60 hours a week.
The idea of being a digital nomad with no oversight is romantic, but when your income is project-based or hourly billed, you start feeling like every waking moment you aren't working is costing you money.
Maybe this $21,000 will simply allow you to say "no" to more projects that aren't of interest, at least for now. You said you want this to buy you a bit of freedom, which, to me, is the ability to do whatever you want with your time when you want.
You're right that this windfall might not totally change your life, but it could make it a little more exciting for a bit.
Write to Dollar Signs at dollarsigns@marketwatch.com.
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-Aditi Shrikant
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March 20, 2026 13:16 ET (17:16 GMT)
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