I've got a ways to go (1-2 years) before ER, but thanks to this site have become so much the wiser. I think I've ruled out SPIA as part of my ER portfolio, but would like some confirmation:
Since SPIA's payments include return of principal, the % rate of return is by defintion overstated, compared to CD, etc. If I would be reasonably financially secure (outside of any planned annuity), wouldn't I be better off NOT getting an annuity? I figure the chances of the principal appreciating are at least as good as the combined "return" of principal and interest from an annuity.
I also have a reduced life expectancy, which leads me to believe I'm better off eschewing an annuity. I realize this is an individual decision, but am I missing anything in my analysis?
Since SPIA's payments include return of principal, the % rate of return is by defintion overstated, compared to CD, etc. If I would be reasonably financially secure (outside of any planned annuity), wouldn't I be better off NOT getting an annuity? I figure the chances of the principal appreciating are at least as good as the combined "return" of principal and interest from an annuity.
I also have a reduced life expectancy, which leads me to believe I'm better off eschewing an annuity. I realize this is an individual decision, but am I missing anything in my analysis?