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Old 10-21-2015, 12:32 PM   #41
Recycles dryer sheets
Aeowyn's Avatar
Join Date: Jan 2011
Location: Scotts Hill, TN
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Originally Posted by nun View Post
An IRR of 3.7% and a payout rate of 6.2% (using the quoted lumps sums and payouts starting at 55 and assuming an average life span) is better than you will find on the open market.
Thanks for confirming the reason I hate annuitization. IMO the only one that makes out on that transaction is the insurance company.

Quit my J.O.B to become a farmer/rancher - December 2011
Now working part time from home on contract to support prior employer.
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Old 10-21-2015, 12:45 PM   #42
Thinks s/he gets paid by the post
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Join Date: Feb 2006
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Originally Posted by Aeowyn View Post
Thanks for confirming the reason I hate annuitization. IMO the only one that makes out on that transaction is the insurance company.
Well going with the pension rather than the lump sum is effectively taking an annuity. If you took the lump sum you couldn't buy an lifetime SPIA with better terms, but you would have all the usual options available of how to invest that money. Personally I'd lock in the guaranteed income from the pension in the expectation of living an average lifespan and getting 3.7% annual interest and invest the rest if my portfolio in something like Vanguard Total Stock Market and maybe even se riskier areas

So we beat on, boats against the current, borne back ceaselessly into the past.

Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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