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What do you think of buying an annuity with our 401k funds. My husband is 56 yrs old and totally disabled.He only has 60k in 401k.

I think that since your husband is disabled, he can withdraw whatever amount he wants to from his 401k without paying any penalty (he'll still have to pay taxes).

If the reason you were considering the annuity is to provide monthly payments in a convenient form, I would suggest you roll the entire 401k into a mutual fund company like Vanguard, who offer the service of monthly distributions automatically from any of their funds. Then you could invest it in a fund of your choice, and simply have Vanguard mail you a check every month. Of course you would have to monitor the balance to make sure it was being drawn down (or not drawn down if you are taking only dividends/interest) the way you intended.

-rkm
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