DEAR BRUCE: My wife and I are both 69 years old. We are both retired due to downsizing. My wife has a roll over 401(k) at $75,000. We have been trying to figure out where to put this. I recently read one of your articles about annuities; we were planning on going this way until I read what you wrote. Our goal is to use some of this money at the same time create income. This annuity salesman said that upon purchasing $100,000 a person would get $12,000 back and at the age of 72-1/2 get $638 per month. He also said if we wanted to we could get the total amount back, does this sound too good to be true? -- W.G., via e-mail

DEAR W.G.: The troublesome part about your inquiry is that you want to use some of the money and create income. Unfortunately, the saver today is incredibly penalized. Bonds and money market funds, mutual funds and CDs are all paying a tiny percentage. There are many salespeople out there selling some relatively new annuity products that do have some merit. Generally speaking, the thing that is played down is your ability to withdraw the money without waiting for a good many years. The penalties for withdrawing are very considerable. Unless it's necessary to generate income instantly, it gives me no pleasure to recommend that you consider the low interest rates that CDs are currently paying. In the event that you are not comfortable with the small amount of return, you ought to consider going back into the marketplace. I have no problem with that if your tolerance for risk allows it. It is not unreasonable to expect somewhere between 6 percent and 9 percent from the market. However you should know that the last few months have demonstrated that there can be a tremendous depreciation in the value of your asset. Even at your age it is not unreasonable to expect that value to recover over a period of somewhere between 2 and 6 years. Never allow yourself to be mesmerized by promises of huge returns without risk.