Dear Ilyce: Last year, my son was in a car accident and has just received a check from an insurance settlement. How can I invest this money for him so that it lasts throughout his lifetime?

It sounds like that car accident might have been serious and your son is continuing to suffer from its effects. If that’s the case, you’ll want to make sure that the settlement is invested wisely.

When it comes to safe investing, everyone always thinks of bonds first. That’s because bonds keep your principal intact and pays you interest regularly. If you’re thinking bonds, think about the I-Bond, which will pay you just a ahead of the rate of inflation. Right now, I-Bonds are set at 2.19 percent. You can find out about them at But you might also want to think about putting some cash into other types of bond funds like a short-term or medium-term bond fund which is paying around 5 percent right now. And of course it’s still possible to lose money in bonds over the long term, so you need to think about the stock market. You can look into different S&P Index Funds and bond funds on

Of course, if it’s a whole lot of money, you may want to spend a couple of hundred bucks and talk to a fee only financial planner about some other long-term investment ideas.

Dear Ilyce: My father-in-law passed away last June. My wife and I are deciding if it is wiser to take a lump sum death benefit or an annuity for the rest of my wife’s life. She is 34. The annuity would be $1,000 per month before taxes. The lump sum would be around $250,000 before taxes.

First let me offer my condolences on the loss on your beloved father-in-law. As for your wife’s inheritance, it’s impossible to know if she’s going to live 21 years, which is the break-even point between getting the lump sum and taking it on a monthly basis. If she lives, you hope that at age 34, she has 50 or 60 years ahead of her. But let’s look at the numbers.

Let’s look at what happens if you take the $1,000 per month, which after taxes is like $667. If your wife lives another 50 years, she’ll get $600,000 which is a whole lot of money. But when she does die, the money stops. Still, there’s no fuss, the money comes monthly and you’ll only have to worry if the company goes under. Now let’s assume the rule of 72, which, which states that if you invest your money at 7 percent, it doubles every 10 years. Over the same 50 year horizon, that $250,000 in cash will grow to be worth $8 million. And you can then pass all of it to your heirs.

Clearly, taking the lump sum is a better idea, even if you only end up with $125,000 in cash after taxes, because if invested at a modest 7 percent, you could end up with $4 million or enough money for several lifetimes. And a fee-only financial planner could help.

To find a fee-only financial planner, visit the National Association of personal financial advisors at or call them toll free at 888-FEE-ONLY.