Yeah, Yeah, Yeah... snicker all you want. Get it out of your system.
I noticed something interesting and wanted to share it and see what you think about it.
This is my defense... (before you heap disparaging remarks on me)
Back in the early 90's DW and I purchased VA's from VG (at least they are low cost). The reason is that tax rates were high, we were maxing tax deferred contributions in IRA and 401ks. We had extra money... it would have to go into a taxable account. But we were FIRE planning. So we contributed to it with excess money in the VA for several years. Eventually there were increases in IRA levels for contributions and 401k contributions... and tax rates lowered. We have not contributed money to the VA Since the late 90's. For the last decade, I have been putting excess investment money in our taxable account(s) because of lower tax rates and needing/wanting accessible money to FIRE at 55.
OK... now that I have rationalized my actions.
For guaranteed income during later retirement years, DW and I have SS and I have a pension. My pension does not have a COLA. We will do the SS 62/70 thing to to maximize the benefits of an early cash stream and a maximum cash stream from SS (for the survivor).
I have been taking a much closer look at SPIAs (and other annuity products for a payout). Some sort of annuity (maybe a ladder of several small ones) will be used to guarantee some level of income for DW and me. I want to provide a base income that is guaranteed (or as close as it can get). By base income I mean minimum acceptable lifestyle. I will round out our planned income... probably with a Bond Ladder. The rest of the portfolio will be in Mutual Funds. I digress.
To the point. I was looking at the VA contract. It has a GMWB (Guaranteed Minimum Withdrawal Benefit).
I compared our GMWB to a SPIA quote at Immediate Annuity... Our GMWB is about the same as a current SPIA quote.
I know that interest rates are artificially depressed so this is probably temporary. I looked at 10 year treasury rates when we purchased these things and rates were in the 5+% to 7% range during the year. Not sure how much those rates would play into setting the GMWB... But I am sure the insurance company was conservative.
I have no doubt that mortality tables have changed since we purchased them also.... reflecting longer life expectancy. I am sure that is reflected in the GMWB.
Now I am wondering if those VAs should be a rung in the annuity ladder. I have always been considering using SPIAs for that purpose up to this point.