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View Poll Results: How much of your income are you expecting to come from annuities YOU purchase(d)?
over 50% 2 1.45%
30-49% 3 2.17%
10-29% 10 7.25%
less than 10% 7 5.07%
None planned (barring Armageddon) 116 84.06%
Voters: 138. You may not vote on this poll

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Old 05-18-2017, 09:32 AM   #41
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At what age do you get $10,000 per year? I might get some later, I know Janet Quinn Bryant recommends some in her book.
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Old 05-18-2017, 09:35 AM   #42
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Originally Posted by Fedup View Post
At what age do you get $10,000 per year? I might get some later, I know Janet Quinn Bryant recommends some in her book.
Never mind! Just kidding. At age 78 purchased back in January of this year from Lincoln National Life through Vanguard. Not sure if this rate is available today. Also, as I said in an earlier post, I always defer my first payment one year.
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Old 05-18-2017, 09:42 AM   #43
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Zero. Pension and SS will more than fill out the fixed component of my income needs.

Also, I have a different reason. This is probably the seed of a new thread so I won't belabor it, but I feel as if the Grim Reaper got called in to w*rk overtime. A big cluster of friends and family either recently deceased or is on the short, steep slope to eternity. Best friend checked out a month ago; DM & DF crumbling like a house of cards on a windy day; two brothers-in-law struggling to coax their last breaths into cancerous lungs; both sisters destined to follow a year later.

It is affecting my outlook on my own life expectancy. On this particular day I am dubious that I would live long enough to recoup the price of an annuity, especially one that doesn't start for a few years.

I know I should be making decisions based on data rather than emotion, but feelings are part of our wiring as humans. Sometimes it's hard to tell the difference between what we think and what we feel.

Whew! Glad to get that off my chest. Thank you for listening.
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Old 05-18-2017, 09:46 AM   #44
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Zero. Pension and SS will more than fill out the fixed component of my income needs.
Then you are one of the fortunate few who don't need an SPIA. I have both a pension and SS, but they are inadequate to meet my income needs, thus the SPIA's.
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Old 05-18-2017, 09:53 AM   #45
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I put "none planned".... but I'm not averse to the idea when/if it makes financial sense. At age 55 and in this low interest rate environment it doesn't make financial sense at the moment.

Just like how I'll handle a major downturn in the market.... by being flexible with my spending and being flexible in my outlook... and how I'm facing the "when to take SS" question (re-evaluating at various age points).... flexibility and being willing to consider options is my plan.

That said - DH's SS, our rental income, and my small non-cola'd pensions cover 50% of our annual spending now... with my SS still to come at some time in the future.

I don't see a point where I would annuitize 100% of my spending needs... but could see 10-25% being attractive.
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Old 05-18-2017, 09:54 AM   #46
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I have a couple of annuities purchased from a friend who became a "financial adviser" when I was younger and stupider.

I've already rolled two of them over to IRAs. I'll be looking at doing the same for the others once they come out of their surrender period.
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Old 05-18-2017, 09:58 AM   #47
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I have a couple of annuities purchased from a friend who became a "financial adviser" when I was younger and stupider.

I've already rolled two of them over to IRAs. I'll be looking at doing the same for the others once they come out of their surrender period.
You're talking about a completely different type of annuities. This thread is about SPIA's.
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Old 05-18-2017, 10:00 AM   #48
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I don't see a point where I would annuitize 100% of my spending needs... but could see 10-25% being attractive.
I can't find it now, but I read an article a while back that said most people don't purchase annuities much beyond 30% of their nest egg. Yes, there are undoubtedly exceptions.
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Old 05-18-2017, 10:01 AM   #49
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Originally Posted by Gill View Post
Never mind! Just kidding. At age 78 purchased back in January of this year from Lincoln National Life through Vanguard. Not sure if this rate is available today. Also, as I said in an earlier post, I always defer my first payment one year.
Gill
You must plan to live a long live. 78 is cutting it close for me. I don't know if I last until mid 80s. If I purchase it now, I have a good chance to use this benefit for 30 years.
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Old 05-18-2017, 10:10 AM   #50
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Then you are one of the fortunate few who don't need an SPIA. I have both a pension and SS, but they are inadequate to meet my income needs, thus the SPIA's.
Gill
"Need" is a very strong word. You're implying that if you don't have enough income to cover expenses, you have to have an SPIA. There are plenty of us who are happy to use a total return strategy and sell off some of our investments to meet expenses. I'll buy SPIAs if and when it makes sense to me. I'm pretty sure I'll never "need" to buy them, but they may improve my financial situation if I do outlive my life expectancy.

The thread title and OP said nothing about this being only about SPIAs, btw.
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Old 05-18-2017, 10:14 AM   #51
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No current plans. Fortunate that Megacorp pension + SS will provide us with a very nice base income.
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Old 05-18-2017, 11:17 AM   #52
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I bought a small SPIA that I planned on starting at 62. It should cover about 20% of my spending initially but that will decrease as it is not COLAed.
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Old 05-18-2017, 12:01 PM   #53
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None planned, so I answered "zero". The exception would be if we approach Otar's "Red Zone" and the combination of mortality credits and a favorable interest rate environment would let us buy a SPIA and maintain a more satisfactory spending level than we could otherwise get.
^This (NW<28 x annual expenses for us)

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I'm watching our annuity hurdle, but I don't plan to buy and annuity. Wouldn't consider it at today's horrible payout premium. If we do, it probably won't be until we're 80+ years old, and then a SPIA unless something better comes along.
^And This (as illustrated below)

Our essential expenses are/will be covered by two small pensions, rental income & SS when we take it @ 70-ish. The portfolio is to get us to that point and, to pay for discretionary expenses & act as a safety net.

Voted 'none unless Armageddon' in the poll.
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Old 05-18-2017, 12:05 PM   #54
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There have been many dozens of (dire) "bond warning" threads since 2009, just one of the latest http://www.early-retirement.org/foru...rld-86798.html. The threads detail the concerns, but very few offer real alternatives ** - so what's the upshot? Anyone can just point out risks without solutions. Put all your $ in cash if you can't tolerate any volatility or risk (other than inflation eating you alive) and you can sustain yourself (it takes about twice the nest egg if you want to go all cash instruments).

** the three most often cited:
- cash hasn't kept up so you've given away some returns for about 8 years,
- dividend stock funds are not equivalents at all, essentially a change in AA higher return/risk, and
- SPIA's, though evidently 86% here haven't bought/aren't actually buying them?
I see your point now. I was thinking you were making reference to some recent worries about bonds. We looked at annuities but decided against them.

Our plans at 57/54 are a simple 60/40 equity/bond AA. We do keep a good chunk of cash(~200k) in savings/money market for opportunities, emergencies and discretionary moments. We'll begin looking at reducing our equity AA exposure in our 60's to establish a more conservative plan. At least that's our plan...and we're sticking to it if we can.
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Old 05-18-2017, 01:35 PM   #55
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You must plan to live a long live (sic). 78 is cutting it close for me. I don't know if I last until mid 80s. If I purchase it now, I have a good chance to use this benefit for 30 years.
That's what an SPIA is all about. I'm insuring against the possibility I will live a long life. My mother died at 100 and grandfather at 97.
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Old 05-18-2017, 01:54 PM   #56
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When you talk about prospective longevity it's like the market:

Prior performance does not guarantee future returns
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Old 05-18-2017, 02:17 PM   #57
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When you talk about prospective longevity it's like the market:

Prior performance does not guarantee future returns
Yep but, it really does come down to odds though, doesn't it.

I think of longevity calculators like I do the CAPE Ratio: based on a set of factors, "the odds are" that there will be the predicted result. IMO, that's a good place to start. If one wants to be more conservative, adding years or $$$ from there is always an option.
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Old 05-18-2017, 04:18 PM   #58
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When you talk about prospective longevity it's like the market:

Prior performance does not guarantee future returns
True there's no "guarantee," but it's not random either - somewhat correlated and therefore somewhat predictive within family. I've never seen anyone here putting guarantee and longevity in the same sentence. My Mom lasted until 93 and Dad is still living semi-independent at 95. So I can't plan on less...I wish I could.
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Old 05-18-2017, 04:22 PM   #59
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That's what an SPIA is all about. I'm insuring against the possibility I will live a long life. My mother died at 100 and grandfather at 97.
Gill
It makes sense in your case. You may have to deal with longevity. Not likely in my case.
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