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Sooo....
What the graph shows is if your portfolio is doing crappy... you annuitize at 82... if it is doing 'mean' then 92... if great... never...
Now, this does mean that you were only going to annuitize the percent of your portfolio that the graph shows (maybe 60%) when you first made the decision at age 65... but now have to annuitize 100% when you cross the line...
To me the amount to leave for 'bequests' should be taken out of all calculations on the annuity....
As an example.... a male aged 65 in Texas would have to pay $740,741 to get an annuity of $48,000 per year ($4,000 per month)... (almost a 6.5% payout, but with nothing when you die)... OR using a 4% SWR you need to have $1,200,000....
So if for SOME reason, you retire with your $1.2 mill... and on day 2 the market crashes and you now have $750,000... Well, time to buy that annuity...
My concern would be... can you buy one for $750,000 that will pay you the $48,000? This is a real risk... and maybe it is muted in that probably the market will not go down 38% in one day.... but it has come close to that a couple of times...
And if it DID... would you be willing to 'pull the trigger' on such a down market? Not likely... you would think that the market will come back and you don't want to buy when it is SO down....
To me... there is NO way to get rid of risk... you just have to live with it... some more than others.. we try to minimize them as much as we can, but in so doing usually create some other risk that we did not have in the first place....
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