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Old 03-28-2010, 02:24 AM   #81
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Originally Posted by explanade View Post
Seem to recall that OJ Simpson was able to avoid paying the judgement to the Goldmans because his retirement income came from annuities.

He was able to play a lot of golf with that retirement money.

Of course, whatever his retirement income source, it didn't protect him from stupidity.
I think his failings go well beyond stupidity.

Ha
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Create your own Annuity concept
Old 03-28-2010, 05:44 AM   #82
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Create your own Annuity concept

How to create your own Annuity concept using 2 mutual funds.

This concept may interest you. See links for Morningstar forum.

For $1/Month Income you need $250 to $300 invested in following funds.
Using Vanguard Wellington VWELX & Vanguard Wellesley Income VWINX

Annuity Factor Examples - Morningstar

Thanks.
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Old 03-28-2010, 05:56 AM   #83
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This is a lot lower payout than purchasing an immediate annuity even at today's puny interest rates. On $1M for two life annuity both 58 I think I can get over $5k/month. As interest rates will rise before I retire, I think I should be able to get $6k/month. True, using the funds leaves principal intact; but that doesn't matter as much with no heirs.

Marc
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Old 03-28-2010, 06:23 AM   #84
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Quote:
Originally Posted by Manji View Post
How to create your own Annuity concept using 2 mutual funds.

This concept may interest you. See links for Morningstar forum.

For $1/Month Income you need $250 to $300 invested in following funds.
Using Vanguard Wellington VWELX & Vanguard Wellesley Income VWINX

Annuity Factor Examples - Morningstar

Thanks.
I interpreted the linked post as merely validating the 4% SWR rule of thumb.
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Old 03-28-2010, 07:14 AM   #85
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IMO - longevity risk is the main reason to buy a SPIA. In other words, you think you may outlive your resources. If you believe that and can afford to do so... delaying SS should be done before buying a non-cola or cola SPIA. If you do not believe your chances are very high that you will outlive your resources... I can see no reason to buy one.

I have considered using a SPIA. But for DW and I... I believe delaying one of our SS is the better approach. (assuming SS does not change significantly for people approaching retirement).
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Old 03-28-2010, 07:29 AM   #86
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IMO - longevity risk is the main reason to buy a SPIA. In other words, you think you may outlive your resources. If you believe that and can afford to do so... delaying SS should be done before buying a non-cola or cola SPIA. If you do not believe your chances are very high that you will outlive your resources... I can see no reason to buy one.

I have considered using a SPIA. But for DW and I... I believe delaying one of our SS is the better approach. (assuming SS does not change significantly for people approaching retirement).
I can think of at least two other reasons for SPIA. First is to have the ability to safely increase your SWR above 4%. Not only is the SPIA payout above 4% (well above if interest rates return to normal) but you can play riskier on your non SPIA funds. Second, is to use it as assured ability to pay for some level of long term care without the high expense of LTC insurance.

Marc
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Old 03-28-2010, 07:57 AM   #87
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I can think of at least two other reasons for SPIA. First is to have the ability to safely increase your SWR above 4%. Not only is the SPIA payout above 4% (well above if interest rates return to normal) but you can play riskier on your non SPIA funds. Second, is to use it as assured ability to pay for some level of long term care without the high expense of LTC insurance.

Marc
I think SPIAs can good for certain situations.

[no offense] But the ones you cited are not two of them. Or at least... not reasons that would cause me to buy one.
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