Q. My wife and I are 66. I have a $56,000 IRA. She has a $37,000 IRA (total $93,000). Both are in CDs at 2.5 percent. In 4 years we must start mandatory withdrawals. We now get about $70,000 a year from Social Security, her pension and interest on $700,000 in CDs. We also have a house in Mexico and one in Tucson, no mortgages.

Part of our Social Security is already taxable ($13,000 of $25,000) and any annuity payments would be taxable. A recent Wall Street Journal article suggests using life annuities— but doesn’t say whether or not it makes sense. It seems the best bet would be to wait until we're 70 and then convert the IRAs to guaranteed 10 year annuities. The imputed rate in an annuity seems to be always higher than a CD. What do you think?—A.R., by email

A. Converting your $93,000 in IRAs to 10-year guaranteed joint life annuities will increase your income AND taxes more than simply taking required minimum distributions. But it will also eliminate the hassle of managing the IRAs which are a small portion of your retirement assets. Basically, you'll be "front-loading" your consumption from the IRAs since you'll have more purchasing power now and less later as inflation erodes the purchasing power of the fixed income.

You can understand by comparing these figures:

Annual Required Minimum Distribution rate at 70 3.65 percent
Annual RMD rate at 80 5.35 percent
Annual RMD rate at 85 6.76 percent
Annual payment on joint annuity w 10 years guaranteed 6.80 percent

As you can see, it will take 15 years before RMDs require the same amount of distribution as you'd be receiving from the life annuity with 100 percent survivor benefit. (The life annuity quote comes from www.immediateannuities.com).

While you may have some concern about the taxes you are paying on your Social Security benefits, the good news is that this is a tax that has a limit and you're close to it— you’ll never pay taxes on more than 85 percent of your benefits.

Q. I am 93. My wife is 83. We have moved to an Independent Living facility. I fear I may not live long enough to care for her to the end. She has cognitive problems that are expected to get worse. Her care will be very expensive.

We have $630,000 in mutual funds under management at 1 percent. We also have eight EE bonds with a value of $25,248, purchased for $20,000 seven years ago. We have two fixed annuities; one was purchased for $50,000 in 2003, now worth $54,342. The second was purchased for $110,000 last year, now $112,288.

Do you agree that the two fixed annuities are good for our situation? Would we be wise to sell the mutual funds soon, cash in the EE bonds, and reinvest the proceeds? If so, where would you recommend we place them? —W.P., Nashville, TN

A. Most fixed annuities today are offering substantially more attractive yields than CDs and Treasuries. Many also forgive penalties for early withdrawal under medical duress and some other conditions. So, yes, the fixed annuities are probably a good investment for you.

One thing you might consider is converting the two annuity contracts into period-of-payments contracts. You could, for instance, convert them to monthly payments for 5 or 10 years. You could also keep the contracts as is and convert a portion of your mutual fund investments into monthly income annuity contracts. Note that I am suggesting payment periods of 5 to 10 years, not life annuity contracts.

But in the big picture these choices rank far below the more pressing questions— such as care for your wife, with you or without you. More than a few caretakers have died before their ailing spouses, exhausted by the work and their resulting social isolation.

You’ve taken a very positive step in moving to an independent living facility. I hope it is also a continuing care community that can care more intensely for your wife as her cognitive issues increase and she needs full-time nursing supervision. And, as I’m sure you will learn, you now have an opportunity to build a new network of personal support and friendship.