nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
IMHO, annuities are going to be a product that some people are wired for and some aren't. I am referring to variable annuities because there seems to far less discussion on SPIA's.
I figured out what I needed as income and decided I wanted SS and annuities to be able to supply that for me regardless of what happened in all the markets. (House paid for, no debt, etc.) I also wanted to secure a COLA if possible and while it might be slight SS does have one and by using an annuity with a product like Wellington in my annuity I feel confident over time my monthly payments will rise which will also help. If it doesn't, oh well, I still have my two payments.
If you prioritize the stable nature of income then an annuity is a good option. Whether the annuity is good value for money is another question. I will not be buying any variable annuities because I think they are expensive. I have put my money into the social security systems of the US and the UK; the US because I had no choice and voluntarily in the case of the UK because of the good value for money....the COLAs are also excellent to have. My employer's DB plan is also excellent value for money with a 7.7% initial payout rate. Given those stable sources of retirement income I will probably not be buying a TIAA-CREF SPIA when I retire, I'll transfer the money I have in TIAA-Traditional to equity investments over 10 years.