Date: Tue, 21 Nov 2006 14:54:18 -0600
From: "joe.spam.weinstein@gmail.com" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Put 401K into an Annuity?
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On Nov 21, 11:48 am, "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

Sure. Ok. Here's a *simple* plan that will give you complete
balance and full diversification and absolutely minimum fees.
You should be able to draw 4% from it every year forever:

Call Vanguard and get them to get your money directly from
your 401k to a rollover IRA (never get the money to you. It
would cause a huge taxable event).
  Tell them to put 50% into their Total Stock Mkt Index fund
and 50% into their Total Bond Mkt Index fund. That's it!

Have them reinvest all dividends and interest until you want
to start withdrawing. Then when you want to start taking
money have them keep all dividends as cash, and withdraw
that. Most years that should cover 4% or more. Then if there
is any money left over, tell Vanguard to invest it in more of
whichever of the two funds you have less of at that time, to
help your allocations stay balanced 50/50). If interest and
dividends do not cover 4% in a particular year, sell enough
of the funds to make it up, choosing the fund with the most
value at the moment, also to help keep your 50/50 balance.

Now note that this is safe over the long term, but in order
to get the typical growth over the long term, you will see
some up-and-down particularly in the stock market fund,
just like it does today. See the graph of the SP500 etc.
If you can watch these changes day-to-day and month-to-
month without panicking, then you should be OK. If your
personal makeup is not tolerant of any up-and-down at
all, let us know, and we'll have safer, less promising
suggestions.

Joe Weinstein