Secured Part of our Retirement Today

[oldphd]

Just running some numbers for the OP's pension and assuming an 35 year joint lifespan and 3% COLA the IRR is 6.5%, so this is a good deal

I've got a similar option available to me through a state retirement plan (though not as lucrative) and am curious what sort of IRR would be considered good?

There are a couple of complicating factors, but just considering the basics of the additional annuity, I get the following numbers. Buy-in of 100K yields $414/month starting at age 60, with a COLA matching CPI from 0 up to 3%. IOW, it won't go down. Think I did the calc correctly, but I get IRR of 4.5% assuming 25 years (to age of 85 with full 3%/year to match the previous calc).

Thoughts?

 

[Options]

There are a lot of mixed feelings about Annuities. They are a high profit item that is sold. And they do provide a stable income.

This.

For those of us without access to favorabe buyouts like that of OP, the general consensus I've been able to find is that partial annuitization after age 75 could be considered as part of a sound financial plan. If your temperament is a match for annuities, that is. I will certainly at least consider it when I reach that age.