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Chris Wrote: Municipal bonds will give about 5% tax-free income at the present time.
Don't rule out an index fund. He needs growth, and to have part of his money in the stock market is the way to get it. It is reasonable to sell some of the shares from time to time to produce cash flow. Since the S&P 500 doesn't change that much during a year, the fund doesn't realize much profit--just the share price increases, so such a fund is quite tax-efficient.
After a few years he might have fewer shares, but each share worth significantly more and actually have more money than he started with.
If he buys bonds, he will know how much money he has and how much income. Over time, inflation will eat him up. If he buys stocks, over a 20 year period the market will go up. Short term it will fluctuate. We have had several years of excellent markets; maybe next year will be bad (though presidential election years historically are good, as the party in power tries to make the economy look good). We have historically high valuations and many think the bubble will burst. Not possible to predict. But if at 69 he is in good health and wants this windfall to last a lifetime, he needs some stocks. An index fund helps avoid the stockpicking.
Good luck! Chris

Reply: Excellent input Chris. Thanks very much.
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