mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,208
aahhhhhhhhhhhhh but the point your missing is this:...yes the real interest rate is very low in the early year of an annuity but heres the point.....follow this now..... the payments you receive each month consist of mostly your own capital being returned plus a little interest...you coundnt have a burn rate of pulling out your own cd ladder or bond ladder money at that same rate as the annuity or you risk killing the goose laying the golden egg... thats the big difference...because the stream of the annuity is forever you can burn all that prinicipal each month...thats why annuities can be powerful if you live long enough ...you have to pass the point where you would have burned thru your own dough at that rate of 7% being withdrawn a year.....