Hi all-
I realize there is a large group here that dislikes annuities, so please do not state your opinion of annuities. I'd like some advice about whether to annuitize an annuity now. Here goes.
I just retired from high school teaching. I'm 62 and single. I have a rather large after tax annuity that I've been contributing to for many years. There was a time (last year) that if I annuitzed then, I'd have a very good annuity income. With interest rates falling dramatically, annuitizing now might be a mistake. Do you agree, or are you of the opinion that when you decide to retire, you can't time the retirement to interest rates? When it's time, it's time.
There is a "graded" option and a "standard" option with TIAA. Last year the graded showed a signinicant increase in yearly payouts over 25 years. Now the "graded" shows a measely increase over 25 years, AND it is much closer to the "standard" option in terms of monthly payouts. I've been told that TIAA has invested in long-term bonds and other investments with low interest rates, so that is why the "graded" shows a small increase. If I delayed annuitization for a year or two, and interest rates rose significantly, would that really affect my annuity income since TIAA has long term low interest investments?
If I did wait, I could take the "interest only" option, which would allow me to live off the interest from my annuity, and that yearly income on the interest currently is about $40,000. However, at the end of this month the interest rates are recalulated for the annuity vintages, and they could fall a lot, and so if did the "interest only" at the end of the month, that could fall by quite a lot. Neverthless, I'd be doing part-time teaching (something I do not mind doing at all),take the inerest only, and wait until interest rates rise. Question is- will they rise, or will the affect of these long term investments from TIAA prevent any large annuity payout increases for years to come?
Your advice, ideas, or suggestions would be appreciated, without your personal opinion on anuities. Thank you very much.
Regards, Rob
I realize there is a large group here that dislikes annuities, so please do not state your opinion of annuities. I'd like some advice about whether to annuitize an annuity now. Here goes.
I just retired from high school teaching. I'm 62 and single. I have a rather large after tax annuity that I've been contributing to for many years. There was a time (last year) that if I annuitzed then, I'd have a very good annuity income. With interest rates falling dramatically, annuitizing now might be a mistake. Do you agree, or are you of the opinion that when you decide to retire, you can't time the retirement to interest rates? When it's time, it's time.
There is a "graded" option and a "standard" option with TIAA. Last year the graded showed a signinicant increase in yearly payouts over 25 years. Now the "graded" shows a measely increase over 25 years, AND it is much closer to the "standard" option in terms of monthly payouts. I've been told that TIAA has invested in long-term bonds and other investments with low interest rates, so that is why the "graded" shows a small increase. If I delayed annuitization for a year or two, and interest rates rose significantly, would that really affect my annuity income since TIAA has long term low interest investments?
If I did wait, I could take the "interest only" option, which would allow me to live off the interest from my annuity, and that yearly income on the interest currently is about $40,000. However, at the end of this month the interest rates are recalulated for the annuity vintages, and they could fall a lot, and so if did the "interest only" at the end of the month, that could fall by quite a lot. Neverthless, I'd be doing part-time teaching (something I do not mind doing at all),take the inerest only, and wait until interest rates rise. Question is- will they rise, or will the affect of these long term investments from TIAA prevent any large annuity payout increases for years to come?
Your advice, ideas, or suggestions would be appreciated, without your personal opinion on anuities. Thank you very much.
Regards, Rob