My MIL is about 67 years old and in excellent health. She managed to get by until now without touching the $200K she has in an IRA, but she will have to start taking distributions in September. In addition to the IRA, she has about $30K liquid (Emergency Fund) and a paid-for house. She "needs" about $2,500 per month and she is getting about $1,000 a month from SS. That means she only has about 11 x annual expenses in her portfolio which puts her clearly in Otar's "red zone".
She can't stand the volatility of the stock market anymore and she is worried about losing money in bonds. So she wants to annuitize her IRA, which is consistent with Otar's recommendations. She wants to get 2 SPIAs (100K each from 2 insurance companies). She also wants full inflation indexation.
I found this article which gave her some leads:
Annuities for Retirement: The Best, and the Rest - Personal Finance - Retirement - SmartMoney.com
Smartmoney's top picks for inflation-indexed SPIA were Penn Mutual, Nationwide, and Massmutual. I looked at Vanguard too (that's where her IRA money is), but their inflation-indexed SPIA is backed by AIG and I don't think she would trust them.
Vanguard quoted her about $900 a month ($200K, single life only, full CPI-indexation) which, combined with the $1,000 she gets from SS, would give her a monthly income of about $1,900 (fully adjusted for inflation). It's less than the $2,500 a month she would want to have, so she will have to cut some spending to make it work. But it beats having to cut her spending down to $1,000 a month in 11 years.
Do you guys have any other recommendation besides the insurance companies I mentioned above?
She can't stand the volatility of the stock market anymore and she is worried about losing money in bonds. So she wants to annuitize her IRA, which is consistent with Otar's recommendations. She wants to get 2 SPIAs (100K each from 2 insurance companies). She also wants full inflation indexation.
I found this article which gave her some leads:
Annuities for Retirement: The Best, and the Rest - Personal Finance - Retirement - SmartMoney.com
Smartmoney's top picks for inflation-indexed SPIA were Penn Mutual, Nationwide, and Massmutual. I looked at Vanguard too (that's where her IRA money is), but their inflation-indexed SPIA is backed by AIG and I don't think she would trust them.
Vanguard quoted her about $900 a month ($200K, single life only, full CPI-indexation) which, combined with the $1,000 she gets from SS, would give her a monthly income of about $1,900 (fully adjusted for inflation). It's less than the $2,500 a month she would want to have, so she will have to cut some spending to make it work. But it beats having to cut her spending down to $1,000 a month in 11 years.
Do you guys have any other recommendation besides the insurance companies I mentioned above?