Originally Posted by chinaco
Often, SPIAs are not compared to securities with somewhat similar risk profiles which (IMO) lead to a bit of an apples and oranges type of debate. If one compared them to a portfolio of high quality bonds... (IMO) the comparison would be more valid than a portfolio of stocks or stocks and bonds.
My take away from the article (being that I/DW have an SPIA) is that those that have at least a base income (provided by the SPIA) feel more confident in taking more risk with their portfolio.
It's no different than many folks on this board that have a guaranteed income due to government jobs or professions that provide DB plans (such as teachers). In some cases, SS is also added to that guaranteed income, which would tend to allow those folks to be more agressive and take more risk with their retirement portfolio - quite unlike those that have no options to them other than to use their portfolio for retirement income (which was the case for me).
Those that have a DB pension, along with SS may not need to consider an investment vehicle such as an SPIA. However, for those that "go commando" in early retirement (as I did), an SPIA gives you an alternative to have a self-made pension, which in turn may allow you (as it did in our case) to be a bit more acceptable to higher risk in our retirement portfolios.