From: joetaxpayer 
Newsgroups: misc.invest.financial-plan
Subject: Re: Put 401K into an Annuity?
Date: Tue, 21 Nov 2006 14:17:10 -0600
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	=/4SQ



Steve wrote:
> 
> 
> Hi.  I'll be 59 1/2 in about 4 1/2 years and at that time I am now
> planning to begin drawing interest off that amount for my retirement
> which will hopefully last up to 30 years or so.  The main kicker is
> that my wife is 5 years younger so she will need the money to last at
> least 30+ years.  We do not have an expensive lifestyle and we have no
> debt.  I just hate to do anything even remotely risky with my "nest
> egg."  Thanks for your reply!
> Steve
> 

You need to get a spreadsheet and run some numbers.
The total you have in retirement funds, and the annual number (%) you 
plan to spend. A 4% spend rate at retirement is accepted as the 90% 
confidence number to use to ensure you don't outlive your money. It 
includes an inflation increase each year. But it also presumes the year 
to year risk the stock market brings. The 100% safety one seeks points 
to being in bonds, but stocks beat bonds over the long term.

In the end, whatever you choose, the fees will matter. If your goal is a 
4% annual withdrawal, how can you afford to pay such high expenses 
(2-3%) and still produce the returns you seek?

JOE