Investing in my mid 60s what's the best approach?

14 December 2021

Question by Penny

I am in my mid 60s, retired, have 50k/100k to invest, financially sound, no debts. I have approach a couple advisors, either no reply, or the fees are very high. I am not keen to invest in too long term due to age! A small monthly income would help as I have no pension, can anyone suggest what to do? Thanks.

Answered by Boring Money

Hi Penny,

It's great that you're thinking about your options with your money, rather than letting it sit in your savings doing nothing.

I can't give any personalised advice, but there are some options for you to consider.

Whilst it's true that money that you'll need in less than 5 years time should usually be SAVED - like your emergency fund etc. This may not be the best way to prevent your money from being eaten up by inflation over the longer term.

Money that you won't need for more than 5 years would normally be INVESTED so that you can beat inflation and get some growth on your money. You'd usually choose a fund based on the level of risk you're prepared to take and hold it in either an ISA or Pension wrapper depending on your needs and wishes.

Pension contributions benefit from tax relief - but you'll pay tax on some of the money when you come to draw on it. As a non-earner, you're limited to paying in £2880 into a pension each year which gets made up to £3500 with tax relief from HMRC - and you can do this even if you are retired to get some of this FREE money.

There is no tax relief on ISA contributions but any money in the future you withdraw has no further tax to pay. You can invest a maximum of £20,000 a year into an ISA.

The value of investments goes up and down over the short-term (volatility) but tends to increase over the longer term - which is why money to be invested is for medium / longer term outlook - and remember there are no guarantees, you may get less than you put in...

You could also consider buying an annuity with the money to create a guaranteed income for life (or until your state pension starts if it hasn't already) or an investment property which could provide rental income - but both of these options have upsides and downsides too!

A financial adviser can help you create a plan for the future (at a cost) or you can self-select and use an online platform to hold your investments - it's likely that you'll pay £2500 or more for advice, depending on the amount you choose to invest, the complexity of your case and the route you go down - on forums like this you'll only be able to get a few pointers to help you decide if paying for advice is worth your while or not.

Hope that helps


Answered by

Boring Money