I understand there is a $130000 annuity that could be purchased with in the IRA that would not be taxed immediately. What are the benefits sales commissions and costs of such a policy when purchased at age 83.

Hi Vincente – I’d start by sitting down with an accountant and figuring out the tax liability involved in selling those properties. That will reduce the proceeds. You might also compare the rent income you’re getting on those properties to the income you’ll get from the annuity. And of course, real estate has the advantage that it tends to keep up with inflation (rents rise over time). You really have a lot of number crunching to do, there’s no easy answer, certainly not one I or anyone else can give you online.

What are my options?

Hi Stewart – The best way is to sit down with an agent and have him or her run scenarios for you. There are different types of annuities with different provisions. One thing to watch out for is the possibility the insurance company will retain the funds if your money outlives you. It’s a common annuity provision, so you’ll have to look for an annuity (or annuity rider) that prevents that from happening. And you’ll have to be very clear in stating that objective.

You should looking into an annuity with a guaranteed income for life. It will continue to pay you even if the principal in the contract has been exhausted. And once you die, the insurance company will return any unused funds.