Do any of you have any opinions on a variable annuity as an investment for my 77 yr. old mom?Our ex-broker put us in a variable annuity years ago and now that I've read up on them I've learned that it was a bad choice for us but a good one for the broker & insurance company. You pay both. We would have had to pay too high a tax penalty to pull out at this point, so we did the next best thing. We rolled it over from high fees and no index funds to a Vanguard Annuity that offers the Index 500 (long term investment) or other types. If you do feel an annuity would be right for your mom, we found Vanguard's to be our best bet. Here is what I've learned about GNMAs - please correct me, other Fools, if I have anything wrong. If your choice of investments is fixed - the GNMA pays better than money market or CDs - historically averages about 6 1/2%. She can reinvest dividends, or have them all paid to her for income, or take partial payments and leave some dividends reinvested. It's safe (government backed mortgages) and a no-brainer. You can buy them directly from Vanguard with no broker fees. She should understand the price fluctuates with interest rates, but as long as she wouldn't need to sell the principal for at least 5 years - she should be able to sleep without worrying.No, I'm not paid by Vanguard, just a big fan because they offer some of the lowest fee funds in the market and have great customer telephone service.Charlotte
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