Q. I'm recently divorced with 120 months of Child Support Payments at $1,000 per month or $12,000 per year and 192 months of Alimony Payments at $3,000 per month or $36,000 per year. I am looking for the best solution for a jumbo CD that would be large enough so that these payments would be covered by the interest earned over the life of the payments. Any suggestions?

A. If you got $100,000 jumbo CDs at 5.25%, your APY would be 5.38 and you'd earn $5,378 per year on each one. You would need nine of those to make the $48,000 a year you'd need to meet your obligation.

There are two drawbacks to doing this. First, you'll be tying up $900,000 for the next 16 years. Although you'll get your principal back you won't benefit from any of the income it generates.

The bigger problem is that you'd have to buy short term CDs in order to obtain the interest from them. While we think rates are likely to remain fairly stable throughout much if not all of 2007, most economists believe it's far more likely they'll decline over the long haul than increase.

So six years from now the best CDs could be paying 2.5%, which would require you to tie up even more of your money to cover your obligation to your former wife and child, or spend part of the principal, or both.

An alternative that makes more financial sense, and gives you much more certainty, is buying an annuity for each of them.

A major insurer told us a 10-year annuity for your daughter would cost $99,000 and a 16-year annuity for your spouse $419,000. In other words, spend $538,000 now and your obligation is taken care of.

If you took the extra $462,000 you wouldn't have tied up in CDs and invested it in stocks and bonds that earned a modest 7% a year, you'd have nearly $1.1 million at the end of 16 years, or more than the $900,000 you would get back from the CDs.