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Old 07-06-2012, 06:45 AM   #61
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Originally Posted by ShokWaveRider View Post
I would love to die penniless.
I would rather die with money than live without it ...

IOW, don't live "too close to the bone", just to be able to retire earlier than you probably should, from a financial standpoint. Just my POV.
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Old 07-06-2012, 07:08 AM   #62
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Join Date: Jun 2012
Location: Halifax
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Originally Posted by ShokWaveRider
I have been reading about SPIAs today. I feel that it is not the best time to get them right now though. However, even now $500k brings about $2500 pm for me and DW for life as long as I do not go to Berkshire Hathaway who seems to want $300 pm for the privilege. So $5k pm for $1m. More than enough for us. Plus we have (what I consider to be) lot more cash in qualified accounts to spare for a rainy day along with DW's income...... When I am 62 I can get about $1500 PM based on the last estimate from SS. Even if we go back to Canada to solve the Healthcare problem and have to pay 50% more for a home it could be doable.

Now, how does one research the viability on SPIA insurance companies? SPIA premiums are NOT insured and what is to stop even mega companies like Allianz and American Equity filing bankruptcy?

Any Canadians out there? Does Canada have SPIAs or what is the equivalent name over there? I trust Canadian financial institutions a little more than US ones at the moment given all the Fraud that is taking place lately. But when UK banks like Barclays are under investigation seems like the only safe place is the Bank of Mattress!

SWR
Yes, in Canada we just call them life annuities.
There is a widely used service that will provide a list of the top 15 quotes from various companies that many/ most insurance offered use.
The top list can change daily, so get a level first to decide your options (I.e. guarantee periods) and then another just before you are ready to apply.
Cheers.
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Old 07-06-2012, 02:02 PM   #63
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Originally Posted by ShokWaveRider View Post
.

At the current desired burn rate, our assets will last about 30 years assuming ZERO return and no SS payments (Being VERY conservative here for assessment purposes). This is just a few years off of our desired ideal. This is based on just a simple subtraction and withdrawal from the mattress every month, and not including our home and other assets.
As long as you are showing your withdrawals increasing due to inflation then this works and your nest egg increasing the same amount each year then that is fine. That is, if you need $50,000 a year now and you were planning for 30 years and had $1,500,000 invested to match the inflation rate then you are OK. But if you had $1,500,000 in the mattress thereby not matching the inflation rate and need $50,000 a year for 30 years you aren't OK unless you are planning on that $50,000 buying a lot less in 20 or 30 years and you reducing your standard of living substantially because it will get eaten away by even low inflation.

Now if you are putting $1,500,000 in the mattress and you figure withdrawals for 30 years starting with $50,000 the first year and you adjust by some inflation percentage each year for 30 years and you still have enough to last 30 years then that is different.
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Old 07-06-2012, 03:09 PM   #64
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Originally Posted by Katsmeow View Post

Now if you are putting $1,500,000 in the mattress and you figure withdrawals for 30 years starting with $50,000 the first year and you adjust by some inflation percentage each year for 30 years and you still have enough to last 30 years then that is different.
30 years is fine planning period for a 65 year old couple. If my math is correct his wife is 54 or 55. So a 30 year period is not long enough for a portfolio where the principal will be reduced. The more I think about the OP is actual a perfect candidate for buying either an SPIA or a deferred annuity (aka longevity insurance)
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Old 07-06-2012, 07:56 PM   #65
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ShokWave, I suggest you read Moshe Milevsky's "Pensionize your Nestegg". All you ever wanted to know about annuities, and Canadian content to boot.
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Old 07-07-2012, 03:45 PM   #66
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ShokWave, I suggest you read Moshe Milevsky's "Pensionize your Nestegg". All you ever wanted to know about annuities, and Canadian content to boot.
Yes, a great book by a great author on inflation, longevity and sequence of return risk.
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