harley
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I've seen a number of annuity vs. lump sum threads recently and I almost always choose the lump sum. I've noticed others who pretty much always choose the annuity. So I decided to run a poll to see what the breakdown of this forum looks like.
Here's the question. Assume there's an annuity offer where you get a decent payout without COLA, maybe running about 6.5% of the lump sum's current value. It's lifelong, no survivor benefit, no bells and whistles. The lump sum is just that. You don't need the money to live on anytime soon, so you have the option of investing either option for the future if you prefer.
I'm assuming that the annuity is based on reasonable actuarial decisions, not overly optimistic or cynical. If everything breaks exactly like they assume it would be a wash. And that it's pretty safe, not likely to default. But the lump sum gives you the possibility of making significantly more money over time if things turn out well. Of course you could also lose it all if you [-]gamble[/-] invest poorly. The annuity gives you security, with decreasing value over time depending on inflation.
So, based on your personality and preferences, which do you choose?
Here's the question. Assume there's an annuity offer where you get a decent payout without COLA, maybe running about 6.5% of the lump sum's current value. It's lifelong, no survivor benefit, no bells and whistles. The lump sum is just that. You don't need the money to live on anytime soon, so you have the option of investing either option for the future if you prefer.
I'm assuming that the annuity is based on reasonable actuarial decisions, not overly optimistic or cynical. If everything breaks exactly like they assume it would be a wash. And that it's pretty safe, not likely to default. But the lump sum gives you the possibility of making significantly more money over time if things turn out well. Of course you could also lose it all if you [-]gamble[/-] invest poorly. The annuity gives you security, with decreasing value over time depending on inflation.
So, based on your personality and preferences, which do you choose?
Last edited: