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Subject:  Re: Variable Annuity vs Bond Fund Date:  10/5/1999  5:49 PM
Author:  rjm1 Number:  14248 of 88530

My mom (76 years old) is getting ready to sell her house, and I need some advice on
how best to invest the profit she makes on it so that she gets a monthly income to
suppliment her Social Security.

I expect the profit to be at least $110,000, and we estimate she'll need about $600/mo
income. We're looking for something I can just setup and not worry about as it sent her
monthly checks for the next 7-10 years.

I had originally thought about putting the bulk of the money in a Vanguard bond fund
(or a bond fund/money market mix) and setting it up to automatically transfer money to
her checking account each month (reinvesting dividends, of course).

Then I poked around on the Vanguard web site, and started reading about variable
annuities. It seems an annuity may be be better for her situation, as it would be very
low-maintenance, and would also guarantee her an income as long as she lives.

Any thoughts or advic

There is alot written about annuities on these boards and most is negative.

However, Vanguard should be low cost so that is a good start.

If you want lifetime payments an annuity could be for you. However, remember inflation.

Some exposure to the market maybe good (if she and you can take the risk). Maybe a variable annuity with 25% in an index fund and the rest in bonds?

I would search the boards and remember you maybe the one in a hundred that an annuity fits so don't get turned off before you do the research. Some of the posts are very good at giving the pros and cons. Sorry, don't remember what boards.
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