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harryot: "I am 53 years old and my wife is 51. Through the Grace of God I will be getting a lump sum pension and a severence package from my company of 33 years. The total with the 401k is about $1.3 million. I have other investments totaling about $300k which are more liquid. I have been seeking financial advice, however am still confused. One financial planner recommends Variable Life Annuities with a large insurance company. What do you guys think? I have been investing for a few years and I would like to think it was skill and luck that got me to $300k, however it scares me to think that I could manage a portfolio of $1.3 million without professional help and so much on the line."

First, if the severance package is what you wished for, congratulations.

Second, I do not think much about annuities, and I also beleive that your advisor would also thank God if you elected to place $1MM in an annuity through him.

Third, you ought to visit the Retire Early board here at TMF (in Speakers' Corner) and read its FAQ and the related The Retire Early Home Page. If you accept the 4% "rule" as set forth therein (and related corollaries), your $1.6M (which assumes that the $1.3M package is net, after taxes) should support a first year income of $64,000 (pre-tax, you would need to be confident that you could cover whatever taxes were due on your income)that you should be able to inflation adjust every year thereafter for 40 years.

Fourth, If you really want to discuss annuities, you should also post on the Insurance board --- several of its regulars visit here (but I do not recall seeing all of them here).

Fifth, you said nothing about tangible assets, required budget needs (maybe still college expenses for a child(ren)), etc., or even if you were intending to retire or look for another position.

Hope this helps. Regards, JAFO

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