Investment suggestions please

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Beenoskee

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I am looking for suggestions on how to make best use of a lump sum. I am due to retire later this year. I will receive a tax free lump sum of c.€130k. I have no mortgage or other debts. I don't plan to buy a new car. I have a reasonable amount in savings.
On retirement I will have a decent income from both a pension and some rental income. However, I want to use this lump sum to boost my income. An extra €5k or €6k a year would be very welcome. Any suggestions please, but more about the strategy of what types of areas to invest in rather than recommendations for individual funds etc.
 
If you put the € 130k into a savings account, it will earn between € 2,500 and € 4,000 before DIRT tax

Anything that earns more than that is riskier by definition.

So without more information about your attitude to risk, need to access the money, ... it is impossible to give any concrete suggestions

Investing in shares via a fund or directly, would earn more but you need to be looking at a a 5- or 10- year horizon
 
My objective is ongoing income rather than capital growth. As mentioned above I have other income so can live with some risk.

I see 3 options. Can anyone suggest any others?

1. Put it on deposit as mentioned above. Interest rates are low especially versus inflation, so long term I don't think this will work out very well.

2. Try invest in shares that pay decent dividends. The income received may not be any better than putting the money on deposit, but the share prices may grow and act as a hedge against inflation.

3. Put the money in a basket of blue-chip shares, not necessarily paying much in the way of dividends, and sell a small percentage every year
 
In a tax free world, when investing in shares, picking Dividend paying vs non dividend paying shares should make no difference.
However we live in a fairly high tax environment. And so, if investing in shares I would recommend the following
If (when you retire) you are in a low tax bracket, Invest in dividend paying shares.
If (when you retire) you are in a high tax bracket, Invest in non dividend paying shares and sell a portion of them each year.

In general if investing in shares, you want to pick a diversified fund (e.g. ETF's like IWDA or Investment trusts like JGGI) rather than 2 or 3 individual stocks.
 
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