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You can rollover the 401k into an IRA. There are lots of good mututal fund compnies to do so. The IRA can be set up to generate income if you need it. Ginny Maes yeald in the excess of 6% right now. That will give you your income you want. A better solution would put it into 50% fixed income and 50% stocks to protect you from inflation. Any additional income should be taken from your capital. The IRS will require you to start to do this in 10 years anyway. Your capital should last you many years.

Thanks for the reply, Scofield. I can avoid the immediate tax hit by rolling over the 401k into an IRA at a discount broker or mutual fund. I can then purchase an annuity for income. The only tax hit would be the income used each month. In addition, I'm going to look into a new annuity from T Rowe Price. It is a form of an immediate annuity which can grow with a market index. I think I may want something like a 10 or 15 year certain and continuous annuity. I will compare the numbers I get from T Rowe Price with say a balanced stock and income portfolio.
The reason I'm open to the idea of an annuity is that I am now going to be on the other side of the retirement planning curve. In the past the idea of a variable annuity was abhorrent. But now I'm not earning money to grow the nestegg. I'll be trying to maximize retirement income over our life expectancy. I don't even care about leaving an estate for heirs.
---Dannari
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