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Welcome, Alaska Steve. Glad you could join us.

First, there is an Annuities board in Fooldom, where all postings I am aware of get linked. Here is TMF's take on annuities--

Watch out for high sales commission on some annuities. The charges are listed in special sections of the WSJ. One of them was summarized recently on the annuities board.

A websearch will turn up websites that will tell you what income you can expect from an immediate annuity of a given size. The figures vary with the life expectancy of the individual (age, sex, etc), and with current interest rates. That's a good place to begin.

Vanguard and Fidelity offer low cost annuities. They have no sales commissions. Should have great deals for comparison. Fidelity has offices where you can talk to a specialist face to face. Otherwise most is done by phone or internet.

Your mother will get more income from an annuity than she will from a bond, for example. That's because the annuity refunds her principal with the payments. The bond remains part of her estate when she passes; the annuity passes to the insurance company.

By 10 yr instrument, do you mean ten year fixed term immediate annuity? The fact that interest rates are now at historic lows and might be higher some time in the future could make that attractive. The next 10 yr instrument might give higher payout when rates are higher. However, watch out for sales commissions. So I would suggest a careful comparison of how much more you might expect to receive vs say the cost of a 20 yr annuity now.

At age 76, and more of us living past 90, your mother should be concerned about inflation. A recent posting mentioned that Vanguard offers a mixed annuity that will supposedly track inflation. Otherwise, you could be best off to buy 10 annuity now and invest the remaining funds in something containing a mix of stocks and bonds. Then buy a larger annuity with those funds later to allow for increases in cost of living.

Good luck with your choices.
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