My mother recently gifted me $25,000 after she received a huge payment from my father's life insurance. I'm 50, a student on a break until Spring 2012, and not employed. I will be getting married at the end of the year, and my future husband blessedly provides for all my financial needs. Thus, the $25,000 could be invested long-term for retirement. I would appreciate your expert advice on how to invest this money wisely. –Anela Lani Grace Belegaud, Honolulu

Since this money is a gift, you owe no taxes on it, says Keith A. Davidson, an attorney in Riverside, Calif. "You don't even have to report it to the IRS, as long as you can show that it was a gift."

Thus, it makes sense to put as much of the gift as possible into a Roth IRA, so you'll owe no taxes on the principal or earnings when you withdraw the money in retirement. Ordinarily, someone who is single and unemployed would not be eligible for any IRA. (You can only contribute if you earn enough income to cover the contribution.) But since you're getting married at the end of the year, you'll be able to stash some cash in a spousal Roth IRA so long as your husband's income meets contribution requirements and the two of you file your taxes jointly. (Talk about being saved by the wedding bells!)

If you and your husband's modified adjusted gross income is less than $169,000 in 2011, you can contribute up to $6,000 to a Roth ($5,000 plus $1,000 since you're 50). Assuming you and your husband will be planning your retirement together, he could also put $5,000 of that money ($6,000 if he's 50 or older) into a Roth in his own name. The amount you can each put away starts phasing out above that income, zeroing out at a modified AGI of $179,000.

Because the rest of your funds will have to go into a taxable account, it makes sense to stick to index funds or exchange-traded funds, since they're the most tax-efficient. Alternately, you might stuff the dough in a target date mutual fund, which re-allocates your money more conservatively for you as you get older. "The hardest thing to do is to sell an investment that's gone up or buy an investment that's gone down," says Peter Canniff, a financial planner in Nashua, N.H. "Having a target-date strategy takes those decision points away from the investor."

For a typical 50 year old, the ideal mix would be anywhere from 60% to 75% in stocks. But in the end, the right amount of risk depends on your stomach for volatility, current savings, and the age at which you'd like to retire. No matter what, look for no-load funds (which have no sales charge) with a low expense ratio.

--Kate Ashford

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