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My 68 year old mother, widowed for 17 years, is finally selling the family home on LI NY. She has been living almost exclusively on SS and a small $40K life insurance reserve (in an AmExp account) from my dad where the principal is now being tapped. My mom is healthy and active but the house is just too much work to consider a reverse mortgage.

Any suggestions/comments on how best to handle a $120K investment to provide a lifetime of income. She plans to rent an apartment while she waits for HUD subsidized housing (where there are strict income guidelines), probably another 2 years.

Money market funds return next to nothing, so I am considering some kind of Index Bond Fund to provide monthly income but am worried about the risk, say 5 years from now. A conservative Balanced Fund could provide quarterly income.

I have been looking almost exclusively at Vanguard Funds. I am reluctant to inquire with her financial advisor at AmExp because of the 5% hit he takes. I don't think this is "rocket science" but I am looking for other alternatives.

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