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Old 05-02-2014, 01:54 PM   #21
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For a cost of $364k and a monthly benefit of $1848, Excel says you have a negative return until you've received payments for 16.5 years. At 20 years you have made 2.04%. At 25 years it's 3.63%. At 30 years it's 4.52%. At 35 years it's 5.05%. At 40 years it's 5.39%. At 100 years it's 6.08%.

So if you can do better, take the lump sum. Otherwise take the annuity.

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Old 05-03-2014, 05:07 AM   #22
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I had this lump sum vs annuity conversation with good friend recently the consensus was
1. Annuities may make sense if you partner isn't financially astute and you are worried that they couldn't properly manage a lump sum.
2. Inflation is the enemy of the fixed annuity and it exposes the annuity holder to a tremendous an often under appreciated amount of risk
3. Purchasing a portfolio of dividend stocks may prove to be a better alternative. The ETF IDV pays roughly 4.5% - if you lived on the dividends there is no reason you couldn't live to be 100 and be financially fit. Most importantly the dividends and principle will grow over time.

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Old 05-03-2014, 05:46 AM   #23
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Originally Posted by Moneygrubber View Post
Thats what the financial planner said, either works so i have to find where my comfort zone lies.
It doesn't have to be either/or: it could be both. You could take the lump now and annuitize half of it at a time of your choosing. (Personally, when faced with this decision, I took the lump. Just felt it gave me more options and control).
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Old 05-03-2014, 06:21 AM   #24
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I would consider annuitizing the in the future, but no sure if i would need to, i guess the only thing bugging me on the ls is investing in the market at these levels. I know i can dollar cost average, and i am sure the market will be higher 10 years from now, maybe I am answering me own questions...

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