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Thinking about annuitizing part of my 401k
Old 11-28-2022, 07:13 AM   #1
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Thinking about annuitizing part of my 401k

Anyone else looked at payout rates lately?

For yucks yesterday, I looked at immediateannuities.com and the payout rate for a 59 yo male is over 7% for a SLA.

I don't have any actuarial software but it looks like that quote uses about a 4% interest rate.

The 4% return will be locked in via the annuity, so I'm thinking about annuitizing 25% of my tax-qualified stash.
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Old 11-28-2022, 07:23 AM   #2
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Quote:
Originally Posted by Big_Hitter View Post
Anyone else looked at payout rates lately?

For yucks yesterday, I looked at immediateannuities.com and the payout rate for a 59 yo male is over 7% for a SLA.

I don't have any actuarial software but it looks like that quote uses about a 4% interest rate.

The 4% return will be locked in via the annuity, so I'm thinking about annuitizing 25% of my tax-qualified stash.
Use this to calculate the ACTUAL Return rate which is important, payout rate include YOUR money + Return. It is best to use the 20 or 30 year certain to do this, not perfect for a lifetime annuity but it does give one an idea.

https://iqcalculators.com/calculator...rn-calculator/
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Old 11-28-2022, 07:30 AM   #3
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^^ You have to know the life expectancy at current age from the mortality table used by the insurance company to make that approximation. Life annuity factors aren't certain, they assume a little piece of you dies each year until you are 100% dead, so using a certain annuity with a life expectancy is a rough estimate.

Individual annuitant mortality tables are more conservative due to adverse selection.

I used a current life expectancy for a 59 yo male and a 4% interest rate to back into the annuity factor.

I just asked my FA what they thought about it LOL - I've been very protective of my 401k $$$, including leaving it right where it is, at my old Mega
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Old 11-28-2022, 07:40 AM   #4
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thanks - that actually matches my estimate!
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Old 11-28-2022, 08:05 AM   #5
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Quote:
Originally Posted by Big_Hitter View Post
Anyone else looked at payout rates lately?

For yucks yesterday, I looked at immediateannuities.com and the payout rate for a 59 yo male is over 7% for a SLA.

I don't have any actuarial software but it looks like that quote uses about a 4% interest rate.

The 4% return will be locked in via the annuity, so I'm thinking about annuitizing 25% of my tax-qualified stash.
Yeah, that looks about right, actually I get 4.6% at age 82:

Lump Sum  100,000
Monthly benefit  583
Payout rate 7.00%
   
AgenIRR
590 
601-97.9%
612-78.5%
623-57.1%
634-41.4%
645-30.3%
656-22.4%
667-16.7%
678-12.4%
689-9.1%
6910-6.5%
7011-4.4%
7112-2.8%
7213-1.4%
7314-0.3%
74150.7%
75161.4%
76172.1%
77182.7%
78193.2%
79203.6%
80214.0%
81224.3%
82234.6%
83244.9%
84255.1%
85265.3%
86275.5%
87285.6%
88295.8%
89305.9%
90316.0%
91326.1%
92336.2%
93346.3%
94356.4%
95366.4%
96376.5%
97386.6%
98396.6%
99406.7%
100416.7%
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Old 11-28-2022, 08:10 AM   #6
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Yeah, that looks about right, actually I get 4.6% at age 82:
that's (literally) money!
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