Since we are experiencing the Pineapple Express here in the Bay Area I had time to play with this.
I got a quote from fidelity for a deferred annuity for a single man aged 60 deferring until age 70. And then determined the IRR, I hope correctly.
Investing 100000 at age 60 one would receive 13272 per year from age 70. The IRR of course depends on when you die. But if you are a conservative investor concerned with longevity, the results are quite good:
If you live to 100 the IRR is 6.468%
At 95 it's 6.117
At 90 it's 5.536
At 83 which is the life expectancy for a 60 yr old, it's 3.9
And of course goes down from there to a neg number if u die soon.
So if you are worried about longevity the deferred annuity allows you to swap a large positive IRR if you live a long time for a large negative one, if you die early.
If you have good genes and your parents lived to a ripe old age , and you're healthy, then, for me anyway, there's a good case to be made that this is way better than a conservative income portfolio...unless I screwed up the calculation
I'd welcome opposing opinions or someone seeing holes in this as I have severe longevity in my family