Ask Paul: How can I safely invest $200k?

Dear Paul,

I am receiving $200,000 in the near future. I am concerned about where to invest this money so it will be safe.

My husband is 84 and I am 79.

We have just over $100,000 in a self-managed super fund. We own a hobby farm worth $300,000.

I would really like a few options regarding this amount. Any suggestions would be appreciated. - Diana

This is a classic risk-and-return question, Diana. Your safest option will be term deposits.

You'd earn around 5% pretty much risk-free in a term deposit from an authorised deposit-taking institution such as a bank or building society.

But what I don't know is if this would impact an age pension or your overall tax position.

However, a key investment rule is to get your investment strategy right first, then worry about tax.

At ages 84 and 79, you won't be able to add to your DIY super. Speaking of your super, I wonder if a DIY fund with just $100,000 is viable after all the costs and charges. I'd chat to your adviser.

Investing is all about your attitude to risk, your current financial position, tax situation and timeframe.

If you don't need certain income from the $200,000 and won't need access to the money for, say, seven-plus years, you could buy shares or invest in a low-cost fund, such as one run by Vanguard or BlackRock.

But as you advance in years, I wonder if simply investing in a secure term deposit, giving you time to think about it, would 
be your best option.

It is certainly the safest.

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