How should I invest $85,000?

I'm in the military and my wife recently passed away and I will be getting a death benefit of $100,000. I have about $10,000 in debt, want to get some new things ($5,000) and then want to invest the rest ($85,000). I'm 35 with no children and no real estate living in San Diego. I'm currently investing 10% of my income to the TSP (401k) plan. I only make about $2800/mo after taxes. I don't know how much I should keep as an emergency fund and where it would be wise to invest the remainder. Any ideas and/or someone to talk to? Thanks!

I am really sorry to hear about your wife.
Here is what I would do.
1. Pay off all your debt.
2. Have 3-6 months of your living expenses as your emergency fund. ( you want this to be very liquid meaning you can get to it easy like a money market account at your bank)
3. Max out any tax advantage investment accounts like a Roth IRA. I think a single person can put up to $4,000 in it each year as of right now and it will grow tax free.
4. Because you paid off all your debt's try to save 15% of your takehome pay ($420.00 per month) for your retirement.
5. After that you can invest in Mutual Funds, Real estate or any other investment like starting a business that you know. Only buy investment that you know well and not because someone told you to.
6. Save up to buy a home. You would like to have a 20% or more downpayment. And if you get a mortage get a max 15 year FIXED rate.
At 35 and this much going into retirement and no debt you will be very well off!

excellent advice from appstate. I would follow that gudeiline as well.

I know San Diego house price is ridiculously high right now, but it has been dropping. I would suggest you keep the $85,000 in a CD accounts for few more months, and when the price drop down more. You should use it as downpayment for a condo. Of course that would be after deducting the emergency fund. Most financial expert suggest to put 6 months of gross income (monthly salary before tax) as emergency fund. That is a good suggestion if you live within your means.Why not round up to $3,000 a month, so set aside $18,000 for emergency fund?) I hope the $10,000 is all the debt that you owe, and the new items $5,000 is not going to cost any money to maintain or upkeep. Remember not to buy a condo that you cannot afford the monthly mortgage. Buy something within your affordability and make sure adds up all other extra expenses on owning a home. Good luck!