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I have a 403(b) from TIAA-CREF. TIAA gives me more options than the two that you have proposed. Have you talked to them extensively to figure out if any of these other options are available to you? I believe you can even engineer a mix of options, so you don't have to do a an either/or thing.
I think you have described effectively a single premium immediate annuity or SPIA.
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