Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Old 03-22-2008, 06:38 AM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
Join Date: Jan 2008
Location: Chicagoland
Posts: 10,662
Originally Posted by Want2retire View Post
I am not one of those who is against annuities, but even I would consider half to be way too big a percentage for most people to annuitize. I would think 25% to 33% of one's portfolio to be a pretty ample annuity for most who wish to buy one. Just my reaction and hey, what do I know.

Personally, I planned to put about 28% into an annuity until my recent windfall, which allows me a little more leeway. Now, instead of the annuity I will have a substantial chunk in Vanguard's Wellesley. I expect that Wellesley is unlikely to pay as well as an annuity but there are other advantages that are well discussed in other threads.
I am still grappling with annuitization so this if of interest to me, if you care to elaborate. PM if you'd prefer...TIA

No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-22-2008, 07:44 AM   #22
W2R's Avatar
Join Date: Jan 2007
Location: New Orleans
Posts: 34,818
Originally Posted by Midpack View Post
I am still grappling with annuitization so this if of interest to me, if you care to elaborate. PM if you'd prefer...TIA
Here's a thread on the topic of Wellesley vs an annuity that might interest you.

Wellesley vs Annuity

There are many threads on the forum on these topics, so you might want to do a search on them.

Depending on your age, an annuity may pay better than Wellesley. When my ER nestegg was just borderline and I was fighting with my spreadsheet, trying to figure out how to get my goal income, the only way I could seem to get that figure for ER was to work until 62 and take an fixed immediate lifetime annuity with inflation protection. I only have one child and so I wasn't worried about leaving a huge estate.

However, since my recent windfall I will have no problem reaching my goal ER income at all, even without an annuity. I think that for me, an annuity is something that I would have needed with a nestegg that was borderline sufficient, but that I no longer need. (If my investments do badly one year, so what - - I will no longer need a 4% SWR, and in the long run they will probably gain).

For me, the idea of giving up the money to an insurance company and never seeing it again is not a problem. However, what happens if the insurance company goes belly up? I'm not sure. Can they sell the annuity agreement to a less reliable company? I'm not sure. I happen to distrust insurance companies in general and I would find some answers to these questions if I were still to purchase an annuity.

Since you cannot change your mind after buying an annuity, it is worth thinking about how it fits into your overall financial plan's asset allocation and diversification.

"You can never cross the ocean until you have the courage to lose sight of the shore." - - - C. Columbus
W2R is online now   Reply With Quote
Old 03-22-2008, 02:41 PM   #23
Full time employment: Posting here.
old woman's Avatar
Join Date: Dec 2005
Posts: 532
I have no idea what my expenses in retirement will be, I don't even know where I will live. I will sell my current house because it has too many stairs and the basement leaks. So I need to sell and buy a house, move and don't know even what utilities might be in a new place. I figure if the people living in a town have an average income of 30K and I have more I will get by. The big question is medical cost, I might have a problem buying insurance at any cost so go with a very high deductible.
I will plan my budget to have more than I could spend for housing and utilities and some for transportation and wants with a generous margin then if I can't make it I can cut back on wants or find a way to earn a little money. I figure if I had a home paid off I could cover property tax, utilities and keeping a car buying food and minor needs on under 2K a month and SS will pay about 1,200 and a roommate about 800 so I am about at break even before medical or using any lifesavings after 62. I will be 60 next month so waiting for 62 might let me save a little more giving me maybe 400K and a paid off home which should cover medical cost. I could inherit someday but not a lot and not for sure mom has a little but she might spend it all before she goes and I might be 80 before she dies, she was 80 when her mom died.

old woman is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
post retirement expenses ie cars davemcmullen FIRECalc support 4 03-13-2008 10:05 PM
extra expenses? lowered expenses? 72t? retiringat50 FIRE and Money 6 01-08-2008 08:30 PM
Expenses Vincenzo FIRE and Money 11 05-13-2007 07:48 PM
How many years of expenses in cash at retirement? Rich_by_the_Bay FIRE and Money 30 03-29-2007 06:52 PM
Expenses at 85+ citril FIRE and Money 11 03-16-2007 08:38 AM


All times are GMT -6. The time now is 09:02 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.