No. of Recommendations: 3
I assume this would be invested in a non tax-deferred account, not a 401k or IRA. With this said, given what you indicate, you could purchase a defined-period, single payment, immediate annuity, which would pay you a fixed amount over the next 10 years. You might do better than 2%, but I haven't looked the numbers up. Next, you might want to simply put about 80% of the money into something like Vanguard's short-term investment grade bond fund, with the balance in the SP500 index fund. This should do better and last almost forever, assuming you're taking out a fixed annual amount not to exceed an inflation adjusted 2% per year. If you want to deplete the principal over the 10-year period, then simply take more out each year. There are many options out there, both tax-exempt (depending on tax bracket) and taxable. Good luck.
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