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Old 01-07-2017, 11:33 AM   #41
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FWIW, I purchased a SPIA through Vanguard in May, 2015. I compared the same SPIA with online annuity companies, and Vanguard kept 1% less of the commission than the online companies, so their payout was 1% more to me. Therefore, if you are considering an SPIA, I would recommend checking it with the same one at Vanguard to see if that is still the case.

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Rich, you're absolutely right. I have purchased a number of SPIA's, the last three from Vanguard, one very recently, because no one can compete with the premiums charged through Vanguard. As you note, they take a reduced commission and therefore their rates seem to be always better.
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Late retirement annuity?
Old 01-07-2017, 11:34 AM   #42
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Late retirement annuity?

Wouldn't touch non-cola as well. Will matter if you surprise yourself and make it 110+. I'm already grumpy, don't need to be poor and unhappy too.
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Old 01-07-2017, 11:56 AM   #43
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Wouldn't touch non-cola as well. Will matter if you surprise yourself and make it 110+. I'm already grumpy, don't need to be poor and unhappy too.
I have plenty of equities, I-Bonds and TIPs as hedges against inflation without paying the added premium for an inflation adjusted SPIA. You don't needed every item in your portfolio to protect you against the risk of inflation.
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Old 01-07-2017, 12:14 PM   #44
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Rich, you're absolutely right. I have purchased a number of SPIA's, the last three from Vanguard, one very recently, because no one can compete with the premiums charged through Vanguard. As you note, they take a reduced commission and therefore their rates seem to be always better.
Bruce

TIAA-CREF is also a good source. If you have retirement assets with them doubly so and if you want an annuity you should get a quote from them.


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Old 01-07-2017, 12:16 PM   #45
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Nobody has mentioned downsizing or reverse mortgages as sources of late stage extra cash. If you have significant home equity would that be better than an annuity?


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Old 01-07-2017, 12:19 PM   #46
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I have plenty of equities, I-Bonds and TIPs as hedges against inflation without paying the added premium for an inflation adjusted SPIA. You don't needed every item in your portfolio to protect you against the risk of inflation.
Bruce


Then I would suggest you thoroughly understand the simple calculation of how to value a perpetuity. The math says it's worthless in 30years, and darn close in 15-20. I'd also graph the value drop as it is precipitous at the front end.
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Old 01-07-2017, 12:34 PM   #47
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One of the main points of my original post was that since we don't have kids we don't want to leave a huge inheritance when we die. If we invest the money we can never spend it all for fear of outliving our cash. So being more conservative people as most here are we'd end up leaving quite a bit on the table, because we'd never spend so much as to put us in jeopardy.

I've never understood the desire to enrich insurance companies rather than leaving money to your deserving relatives or worthy charities. My goal is to not spend as much as I could, because I don't think it will add to my enjoyment. However, making the life of my nieces and their children a bit easier and leaving a chunk to my local non-profit theater and cinema makes me happy.


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Old 01-07-2017, 05:57 PM   #48
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I've never understood the desire to enrich insurance companies rather than leaving money to your deserving relatives or worthy charities. My goal is to not spend as much as I could, because I don't think it will add to my enjoyment. However, making the life of my nieces and their children a bit easier and leaving a chunk to my local non-profit theater and cinema makes me happy.


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Then of course that's what you should do. I am WAY down the list of wealth that is on this board so I need to maximize what I have.
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Old 01-07-2017, 07:51 PM   #49
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I just checked on immediateannuities dot com. I found that if I buy a $100,000 SPIA at age 85, I would get $1117/month for the rest of my life, no matter how long that is.

If I invested it instead, and took 4%, I'd get $333/month from that $100K.

Inflation between age 85 and death is unlikely to be much of an issue because that isn't much time.

The advantage of investing it, is that I could leave it to my heirs. But, I am inclined to think "so what" since most of my money would not end up in the SPIA.
I'm thinking I'll simply follow the RMD schedule since 3/5 of liquid NW is in IRA's. For age 85 the divisor is 18.4 so $100,000/18.4 = $6,757 or $563/mo. Albeit my situation is different as with a disabled son I want to leave a legacy to help him out.
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Old 01-07-2017, 07:52 PM   #50
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Then I would suggest you thoroughly understand the simple calculation of how to value a perpetuity. The math says it's worthless in 30years, and darn close in 15-20. I'd also graph the value drop as it is precipitous at the front end.


Thank you for educating on the concept of valuing a perpetuity. I'll file that under useless information and not at all relevant to this discussion. Why is it that discussions of immediate annuities always elicit such responses?
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Late retirement annuity?
Old 01-07-2017, 08:16 PM   #51
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Late retirement annuity?

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Old 01-07-2017, 08:47 PM   #52
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Thank you for educating on the concept of valuing a perpetuity. I'll file that under useless information and not at all relevant to this discussion. Why is it that discussions of immediate annuities always elicit such responses?
Bruce


Since you got a bit affected by me referencing the relevant finance theory from the sophomore text book, probably best we don't continue commenting on each others posts from now on. Good day and best of luck to you.
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Old 01-07-2017, 08:54 PM   #53
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Please --- both of you might want to remember the "ignore" feature. It is very useful for everyone.

1. Click on User CP on the horizontal bar above.
2. Then, on the list on the left hand side, under Settings and Options, click on Edit Ignore List.
3. Type the username of the person you wish to ignore, under Add a Member to your List.
4. Hit OK.

Members can't put mods/admins on their ignore list and vice versa.
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Old 01-08-2017, 10:23 AM   #54
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Please --- both of you might want to remember the "ignore" feature.
Thanks for the suggestion, but it is more entertaining to read his posts.
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Old 01-08-2017, 10:41 AM   #55
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Thanks for the suggestion, but it is more entertaining to read his posts.
Bruce
Up to you (as things stand). The "ignore" feature is a handy one that many of our members use, and we like to remind everyone about it now and then by posting a public reminder about it. It has saved many a member from future headaches and battles.

Everyone should also be careful to follow the Community Rules and re-read them now and then.
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Old 01-08-2017, 10:54 AM   #56
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Up to you (as things stand).
Lol! Nicely done.
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Old 01-08-2017, 11:03 AM   #57
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May I humbly suggest that people avoid the use of the word 'you'? As in "You don't understand basic supply/demand as taught in Econ 101".

Far better to say "My Econ 101 professor was very clear that prices are set by supply and demand, not cost of production".

'You' should be left to compliments or nice questions " You have demonstrated a good head for investments, so can you give me your opinion on beaver cheese futures this year?"
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Old 01-08-2017, 11:50 AM   #58
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May I humbly suggest that people avoid the use of the word 'you'? As in "You don't understand basic supply/demand as taught in Econ 101".

Far better to say "My Econ 101 professor was very clear that prices are set by supply and demand, not cost of production".

'You' should be left to compliments or nice questions " You have demonstrated a good head for investments, so can you give me your opinion on beaver cheese futures this year?"
Are You kidding?

[joking aside, good point. ]
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Old 01-08-2017, 01:45 PM   #59
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The best late retirement annuity you can buy is to delay social security. I'd do that at 66 rather than planning to buy an SPIA later in life.

However, I'm not entirely sold on the delaying SS idea as if you take SS at age 62, delaying to age 70 will only net you more money if you live past 83 and if you were to invest the SS from ages 62 to 70 and get 4% a year and then start spending enough from the accumulation to equal the delayed SS payment, then the beak even point would be 91. So for a single person it isn't a slam dunk at all.....for couples it's more complex.
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Old 01-08-2017, 01:55 PM   #60
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Understand why people don't like annuities. Loss of control and poor pricing. Pensions (just an annuity) are certainly loved though. Thing is, annuities are the perfect product for many retirees. Better to buy them later, and hopefully interest rates rise before then. Can't argue with the benefits for many people. Too bad banks don't sell them.
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