My 68 year old mother-in-law needs about $30,000/per year in addition to social security. She has an $800,000 portfolio.

**Option 1:**As I detailed in this post, she could annuitize $400,000 of her 403(B) for $30,000/year with a 10 year guarantee. She could then use the remaining $400,000 to augment her income as the annuity's spending power is inflated away.

**Option 2:**Just withdraw 3.75% of the portfolio each year ($30,000), adjusting upward each year based on the inflation rate. Maintain a 60/40 or 75/25 stock/fixed portfolio.

My instinct is to go with Option 2. She prefers Option 1, as it's "guaranteed" income". I worry about inflation over a 25-30 year retirement. How should we think about this decision? What else should we consider?