<prompt> Human: Hi Guys, My mom is about to retire, she has a pension at roughly 600k and a 401k at around 120k. She doesnt want to leave her money at her employer so she wants to take the lump sum. Shes been talking to a financial advisor who is pretty bent on selling her a Fixed Life Annuity with Allianz. As with most people her age shes afraid of losing her principle amount. I personally dont know what other options would be better. I dont even quite understand how most fixed life annuities work. Does this mean that she essentially gets something like 2k a month from the annuity, she caps out at making money at something like 4.5 and she wouldnt lose any money? That sounds too good to be true doesnt it? Other thoughts have been basically, pay off her house about 250k, eat the tax penalty and live off of her 401k and social security 2,300 a month. Without a mortgage and no other debt that seems like a pretty easy way to live.  <response>: doesnt want to leave her money at her employer so she wants to take the lump sumThis is a REALLY bad idea. If she doesnt want to leave it at the employer, she should roll the money into an IRA, not take a lump sum payment that will trigger a fortune in taxes. If shes really that worried, why doesnt she shop Vanguard or Fidelitys options? Theyre fairly transparent with their pricing and most offer prices that are radically lower than Allianz. Annuities arent investments, theyre insurance plans. Youre sacrificing returns for the knowledge promise that the company youre investing with will continue to pay in accordance with the terms of the contract. Investing 720k would yield more in market investments, Does this mean that she essentially gets something like 2k a month from the annuityFidelity is offering 2,800 a month, assuming your mother is 62 and in Arizona. Just remember that the annuity typically dies with her... 