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Old 11-20-2015, 11:53 PM   #81
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I thought there were many good points in that thread. Thanks for the link. If we end up spending more of our portfolio than planned, I would consider annuities for longevity insurance when we are older.
Again, it's NOT longevity insurance. It insures that you will live in poverty when you get older.
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Old 11-21-2015, 12:03 AM   #82
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Again, it's NOT longevity insurance. It insures that you will live in poverty when you get older.
I don't think so. The people in the thread weren't talking about putting their entire portfolio into annuities. Many were suggesting they were a better deal when one is older. I'd have to run the numbers for myself when the time comes, but I would run the numbers and not just go by conventional wisdom that annuities are bad, because conventional wisdom is not a good substitute for a detailed spreadsheet analysis.
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Old 11-21-2015, 12:08 AM   #83
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I don't think so. The people in the thread weren't talking about putting their entire portfolio into annuities. Many were suggesting they were a better deal when one is older. I'd have to run the numbers for myself when the time comes, but I would run the numbers and not just go by conventional wisdom that annuities are bad, because conventional wisdom is not a good substitute for a detailed spreadsheet analysis.
That's like saying every football team needs a few bad players.

Detailed spreadsheet analysis -- Thank me later -- http://yourinvestmentadvise.com/28-72-history.html
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Old 11-21-2015, 12:30 AM   #84
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That's like saying every football team needs a few bad players.

Detailed spreadsheet analysis -- Thank me later -- http://yourinvestmentadvise.com/28-72-history.html
Is that your site? And your name is etfs-rule? I'm going to take a wild guess here that this may not be a completely objective analysis.
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Old 11-21-2015, 12:53 AM   #85
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Is that your site? And your name is etfs-rule? I'm going to take a wild guess here that this may not be a completely objective analysis.
I'm going to guess that you're an insurance salesman. That site has numbers. Let me help you out... numbers don't lie. Numbers are not biased. It was you yourself who asked for spreadsheet analysis. I found you spreadsheet analysis.
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Old 11-21-2015, 02:15 AM   #86
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I'm going to guess that you're an insurance salesman. That site has numbers. Let me help you out... numbers don't lie. Numbers are not biased. It was you yourself who asked for spreadsheet analysis. I found you spreadsheet analysis.
Actually I said I would run the numbers for myself, as I have no preconceived bias one way or the other. Many factors would need to be looked at like inflation and alternative option projections with various reiterations under different scenarios. That is what we did with our pension decisions.
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Old 11-21-2015, 04:07 AM   #87
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Many factors would need to be looked at like inflation and alternative option projections with various reiterations under different scenarios.
Run all of the historical back testing you want. Nobody has ever run out of money by following the 4% rule and taking a low risk approach to bond / stock allocation. An annuity is fool's gold. Yeah they give you 6.5% or whatever to start. But eventually inflation will leave that fixed annuity payment seeming like less than 3%. Meanwhile you're taking out perhaps double what the annuity pays with a simple bond/stock mix just when you need it most at age 90 and beyond. Again, historical returns are not "biased". The numbers are the numbers. They don't lie, distort the truth or have an opinion. A SPIA is not muddled like other annuity products. Very cut and dry mathematics.
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Old 11-21-2015, 05:40 AM   #88
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That's like saying every football team needs a few bad players.

Detailed spreadsheet analysis -- Thank me later -- http://yourinvestmentadvise.com/28-72-history.html

Well the first problem with the example is that you chose the starting year of 2000 and then also use an annuity payout of 6.3 %. The 10yr was returning 6.5% at the beginning of 2000 so that the annuity payout would be more like 10%.

Second issue I see is that you claim that 2000 would be worst case scenario for your portfolio. However since it's mostly bonds I would suggest using two 14 year periods (as you do in ur example) and begin in 1966 or 1967. Your selected period was a bull market for bonds.

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Old 11-21-2015, 06:36 AM   #89
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Numbers don't lie, but sometimes assumptions fib...


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<mod edit> If anyone says that annuities are anything less than "the spawn of the Devil" they are quickly accused of being an "insurance salesman". There is no doubt that many terrible annuities have been sold over the years, along with may terrible actively managed mutual funds, so people must understand the assumptions being made by people that proselytize for one asset class over another.

As an example I bought a TIAA-Traditional (a deferred annuity) back in 1987 and it has returned an average annual of 5% and is now returning 4%. It has been a good core fixed income for me. Starting retirement with bond rates so low I feel far happier with my 30% fixed income allocation in that deferred annuity than in a bond fund right now. YMMV
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Old 11-21-2015, 11:35 AM   #90
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