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Subject:  Re: Saving Mom's Portfolio.... Date:  1/13/2004  4:06 AM
Author:  TTRoberts Number:  38496 of 78166


You asked:

<<Hi - Am not a new fool, but new to the Fool Boards and need help to save my Mom's financial life. Here are some facts:

She's in her 80's, widowed, like most,lost 40-50% during the last couple years, needs to earn about 6% on what she has, and is only earning about 2.5%. Has 33% invested in Tech stocks, the rest in other diverse equities, and a couple bonds. Broker advising a variable annuity - I feel as though there's a better way to stop her from withdrawing from the princpal each month, than an annuity. HELP!!!

A variable annuity just might work and be acceptable if it's one of the newer types that has some of the guarantees of principle riders. Most people on these boards react negatively with regard to annuities and most often that's based on old data. Yes . . . there are costs associated with that – particularly with variable annuities (no so much with fixed or Equity Index annuities). So . . . you may want to look closely at it anyway as you, and more importantly your Mom, may find that the benefits are worth the costs.

<< With Dad gone, there is no one to advise us who doesn't have an I come to the Fool Boards for advice. Can you help, please? >>

Another alternative you may want to check into is a Split-Annuity arrangement. One annuity for tax deferred growth and the other an Immediate Annuity for a guaranteed income for a period of time (like 5 to 10 years). The Deferred Annuity might suit your objectives if it's an Equity Index Annuity since it won't have the market risk of a variable annuity and can realize a 6 to 7% rate of return with no risk to principle (higher than a regular fixed annuity). Note also that an Immediate Annuity with the life income option for someone