Investing for 15 years

[Deleted User]

Hubby and I are both 50 and starting to panic about retirement (better late than never?) We've identified a large gap in our projected retirement income, and are looking into how we can fill it. One plan we've come up with is to sell our (fairly large) family home and buy a small house for us to live in (and transfer our small tracker mortgage to), and free up the remaining capital (around £100,000) to invest for the next 15 years - until we retire.

But - of course - we wouldn't be able to risk losing the capital. So, any advice about the safest place to put it? Hubby favours the stock market (as he says now is the time to buy shares - as they're relatively cheap); I'm terrified at the idea and would rather we bought a small house to rent out.

Any ideas? Are we missing a better option? All advice gratefully received.

Lokolo

Currently the stock markets are low, doesn't mean they can't get lower. Warn him of this before he decides anything (if you yourself are worried about your capital).

Not very helpful I know lol.

kingmonkey

Probably best to see a good IFA rather than some randoms on the internet.

dunstonh

Cash is the safe end. Stockmarket is the riskier end. There are many options in between. You tend to find a spread of options and not going 100% into any one option is the best way.

theGrinch

you should spread it around. some in cash, some in stocks, gold etc. best to speak to an IFA.

[Deleted User]

Thanks everyone for your replies.

Yes, we would go the IFA route if we decided to go for a non-property investment.

We're just not sure an IFA would be the best person to talk to re the relative merits of buying a rental property or putting the money into something-else?

Good idea to spread it around different options though ...

dunstonh

We're just not sure an IFA would be the best person to talk to re the relative merits of buying a rental property or putting the money into something-else?

An IFA cant tell you to buy a property to rent out. However, they can make you aware of the risks (especially if its a mortgaged buy to let). With it only being £100k, chances are it will be a mortgaged buy to let or a single cheap property.

Rafter

Corona,

As others have said - get professional advice and preferably pay for the advice rather than relying on the commission income on the products the advisor may arrange for you.

You should really think about a proper pension fund if you are looking at buying an income when you retire - the tax advantages over the next 15 years will work in your favour.

Despite your concerns, the return on 'risk free' investments over a 15 year period would only just keep pace with inflation.

Putting all your eggs in one basket with a rental property is not sound investment either.

I suggest a spread of investments across stocks and shares, property etc, but a fund should be able to do this for you automatically. Many funds will also transfer the investments into lower risk stuff in the years before you retire, so if there is a crash just before you retire, your retirement won't have to be delayed or scaled back.

Moving to a smaller property, accellerating payments on your mortgage and paying as much towards your pension as early as possible is also a good strategy.

Also a good strategy is not to invest the whole £100,000 in a fund at the same time. Better to drip the money in over say 12 months and then if there is a sharp fall in share prices soon after you invest, you haven't ended up with a loss from the outset.

Good luck

R.

tonygee_3

An IFA could give you various options but trust your gut instinct
They havent a crystal ball or theyde be making a fortune from investing alone
Agree stagger any investment over the next few years

a7man

Another option for you - stay in your current house until the market rebounds and then downsize. You can then invest the money in a few years time. This of course depends on how badly your home has been hit by the credit crunch & its potential for recovery.

I wouldnt put all your money into 1 property, a spread of investments with links to property via funds would be more beneficial.

kingmonkey

Like other have said. Dont keep your eggs all in one basket.