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Lump Sum Investment after 70

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Hi all-

My 71 year old mother just sold a house and has a lump sum to invest.  She does not have any other income other than Social Security.  I was thinking she should invest in an immediate annuity, although I've always shied away from annuities in general.  Any advice on this or other places for her to invest to get a steady of income?

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There are many ways to set up a retirement portfolio (using Vanguard funds, for example) that will regularly deposit income into a checking account.  

An annuity could make sense, but you need to consider the whole picture when deciding how to set this up and whether an annuity is a good option for all or part of the lump sum.  Does she need (or already have) a fund set aside for unexpected expenses?  Does it matter to her whether she leaves money to others?  If her house sale involved a move, are her future housing expenses covered by the Social Security payments?  Could she accept some variation in her monthly income (this would allow more to be safely withdrawn from a portfolio that has a stock component)?  Etc.

Your question falls a bit outside the usual 403b advice doled out here.  You might consider also posting this question on the Bogleheads forum, where you'll be sure to find people with experience making decisions like the one facing you and your mom. The more specifics of the situation you can offer, the better the advice you can expect.


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Hi Magatuck,

Also known as a Single Premium Immediate Annuity (SPIA). This is the only time when an annuity is appropriate.

You are helping you mom purchase a pension, a private pension to get a guaranteed payout for the rest of her life. These products may have riders such a inflation protection and pay out to a descendant upon her death. But with each rider, it costs in the monthly benefit. May sure you and your mom understand what you are getting into. The sales people are very good at taking care of their interests, and not your moms. 

We are teachers here on this forum and we have been sold terrible annuity products during our working years, which is a big problem with public K12 teachers. 

Whyme suggested bogleheads and there are tons of discussion threads already available. Here is the Boglehead wiki: https://www.bogleheads.org/wiki/Immediate_fixed_annuity 

Do not purchase a variable annuity! or any other annuities. ONLY A SPIA from a low cost company such as TIAA. Others may have suggestions for other low cost companies.  

good luck,


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