As a 70yr old living, with state pension (UK), no home, 150K (GBP) savings – what is best way to invest the money to live off for the next 20 years?

This question and answer originally appeared at Quora.

Firstly you should base your decision on how much income you need each month and work backwards from that point.

At 70 years of age there are some factors to consider that wouldn’t be relevant if you were younger.

You should ensure you have someone to keep an eye on your finances that you can trust. You should at the very least share your thought process and decisions with a close family member if possible and set up a lasting power of attorney in case your health declines. This can impact on your wealth because once you start making investment decisions, reviewing them is essential and you may not realise that you are building up problems or making mistakes.

If you don’t have a family member you should consider discussing your finances with an independent financial adviser and one who is experienced in later life advice. This organisation will be a good start: Society of Later Life Advisers.

To be able to provide better answers you would need to know more about your views and financial position, but as a general idea you should think about investing it into a widely diversified portfolio of income producing assets (dividend paying shares, property and bonds).

You would also want this to be on autopilot as much as possible so should think about different funds, investment trusts and ETFs.

Finally you need all the return and income you can get so make sure you don’t pay too much in fees.

Some people would suggest an annuity in your position and that should be considered. An annuity provides an income for life in return for your capital – the downside to this is that the rates are low (affected by government bond yields) and you have to give up your capital.

As you will be so dependent on using this £150k to support your life you should take professional advice.

You are welcome to contact me directly and I can help put you in touch with a financial adviser after finding out a little more about what you need (I also have a free guide explaining what to consider when looking for an adviser).

Hope that helps

This answer first appeared here.

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Mark Underdown

Financial Planner, Small Acorn Money

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