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I don't mean to sound unkind, but to describe a 63 year old smoker as likely to live another 30 years and having a low risk tolerance seems a bit odd.

She does sound very fortunate, though, to have a son who appears to be well-equipped to help her make some sound decisions. Touching on the points you raise:

1. Home health care is typically a feature of Long Term Care insurance policies, but is probably not available by itself.

2.&3. Great!

4. Here's where the fun starts - considering the greatest security of principal, a Money Market Fund or CD would currently yield about 6-7%, or roughly $10,000 before taxes. An index fund, such as your Vanguard, will probably do somewhat better, although probably not the rate of returns we've seen recently, more like 12-15%, with the potential for some loss (naturally!) As far as achieving a safe mix of investments, it's tough to beat the merits and simplicity of the index funds, inasmuch as they have beaten all but a handful of managed funds over the years, except for the recent returns of the hot Growth Funds.

If you do seek the services of a financial planner, I suggest one that operates on a fee-only basis: otherwise you're going to be talking to an insurance agent/mutual fund salesman in sheep's clothing.
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