Where to Invest an Extra $50,000 in Your 60s for Retirement

I’m 62. Where would you advise that I invest $50,000 for retirement and savings?
—Ty

Where to invest a large sum when you’re in or nearing retirement

Congratulations on having $50,000 to put to work, Ty. Since you didn’t provide details about how you obtained the money or your broader financial picture, I’ll outline the key considerations and options to help you decide. Your best choice depends on three preliminary questions: do you have high-interest debt, do you have an emergency fund, and when will you need the money?

Do you have debts?

Before investing, check whether you carry high-interest debt. Paying off credit cards or similar balances that charge 15–25% interest is usually the best “investment” you can make because eliminating that interest saves you more than most conservative investments can earn.

Mortgage debt is different. A few years ago, when mortgage rates were very low, investing instead of accelerating mortgage payments was often reasonable. With mortgage rates higher today, consider whether it makes sense to pay down your mortgage if you are approaching renewal or if high rates stretch your monthly budget. Entering retirement with less debt gives you more flexibility if your income or health changes.

Do you have an emergency reserve fund?

Make sure you have an emergency fund before committing all $50,000 to long-term investments. Unexpected expenses — a major home repair, a medical bill, or a stretch of reduced income — can quickly wipe out plans if you don’t have accessible cash. Typical guidance is to keep three to six months of living expenses in an easily accessible high-interest savings account. If you don’t already have that, earmark part of the $50,000 for contingencies and invest the remainder.

What are your investment options?

Assuming high-interest debts are cleared and you have a contingency reserve, the next step is deciding how to allocate the money. At 62, you may still be working or planning to retire soon. Your timeline and tolerance for risk should determine how much you put into conservative instruments like guaranteed investment certificates (GICs) or cash, versus growth assets such as equities.

Consider your lifespan

Retirement doesn’t mean you should eliminate investment risk entirely. You also face longevity risk — the chance of outliving your savings. Many financial planners recommend planning for several decades of retirement. That suggests keeping a meaningful portion of your portfolio invested in equities to preserve purchasing power and support withdrawals over a long horizon.

Decision #1: Equities vs fixed income vs cash

Asset allocation is the primary “where” question. A common rule of thumb is to hold equities equal to 100 minus your age (so roughly 38% equities at 62), with the remainder in fixed income and cash. That’s a starting point, not a mandate. Your health, other income sources (pensions, government benefits), risk tolerance, and spending needs should influence the mix.

If you’re unsure about your risk tolerance, free online questionnaires and risk assessments can help you identify a suitable allocation. Once you decide on an allocation, you can build a diversified portfolio using broad asset classes rather than individual stocks.

Diversify beyond domestic stocks

Many investors overweight their home market, but for most portfolios global diversification matters because one country typically represents only a small share of the world stock market. Using low-cost, diversified exchange-traded funds (ETFs) or broad mutual funds makes it easier to own a mix of Canadian, U.S., and international equities, as well as different types of bonds. Model portfolios from reputable advisors can provide practical templates you can adapt.

Decision #2: RRSPs vs TFSAs vs non-registered accounts

Where you hold your investments affects taxes and flexibility. Registered Retirement Savings Plans (RRSPs) offer tax-deductible contributions and tax-deferred growth; withdrawals are taxed as income. Tax-Free Savings Accounts (TFSAs) don’t give an upfront deduction, but investment growth and withdrawals are tax-free. Non-registered accounts are fully taxable on interest and partially on dividends and capital gains.

If you have unused RRSP room, contributing may make sense if your current income is much higher than you expect in retirement because you’ll get a larger tax benefit now. If you expect similar or higher income in retirement, or if you want maximum withdrawal flexibility, a TFSA may be preferable. Contribution limits apply to both accounts, so check your available room before deciding.

Some investors try to place specific asset types in particular accounts for tax efficiency (for example, holding interest-bearing investments in registered accounts). That can work, but it can also complicate portfolio rebalancing. A simpler approach is to maintain a consistent allocation across all your accounts and rebalance as needed.

Decision #3: Online brokers vs robo-advisors vs full-service advisors

Your comfort with managing investments should guide the choice of service. If you enjoy hands-on investing, an online discount broker gives you control and lower fees. If you prefer a set-and-forget approach, a robo-advisor can implement a diversified portfolio for a modest fee. If you want personalized planning and advice, a full-service financial advisor provides tailored guidance but at higher cost. Costs matter, but so does matching the service to your needs and the complexity of your financial life.

Other options: gifting and charitable donations

If your own retirement needs are covered, consider whether you want to use part of the $50,000 for others. Contributing to a grandchild’s registered education savings plan (RESP) or making charitable donations are both valid uses. Charitable gifts can also provide tax credits that reduce the net cost of giving.

Ultimately, there isn’t a single right answer for everyone. The safest approach is to clarify your goals, ensure emergencies and high-interest debts are covered, decide on a sensible asset allocation given your retirement timeline, choose the appropriate account types, and select the level of professional help you prefer. With a thoughtful plan, that $50,000 can strengthen your financial security and support your retirement goals.

This column was written by Russell Sawatsky, CFP, CIM, owner and advice-only financial planner at Money Architect Financial Planning in London, Ontario.

Qualified Advice is written by members of FPAC (the Financial Planning Association of Canada), a MoneySense content partner. FPAC works with governments, regulators, planners, academia and the public to set standards so financial planning can grow as a trusted profession.

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