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Thinking about annuitizing part of my 401k
11-28-2022, 06:13 AM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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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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11-28-2022, 06:23 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,719
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Quote:
Originally Posted by Big_Hitter
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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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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11-28-2022, 06:30 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
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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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11-28-2022, 06:40 AM
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#4
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Quote:
Originally Posted by ShokWaveRider
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thanks - that actually matches my estimate!
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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11-28-2022, 07:05 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,361
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Quote:
Originally Posted by Big_Hitter
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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Yeah, that looks about right, actually I get 4.6% at age 82:
Lump Sum | | 100,000 | Monthly benefit | | 583 | Payout rate | | 7.00% | | | | Age | n | IRR | 59 | 0 | | 60 | 1 | -97.9% | 61 | 2 | -78.5% | 62 | 3 | -57.1% | 63 | 4 | -41.4% | 64 | 5 | -30.3% | 65 | 6 | -22.4% | 66 | 7 | -16.7% | 67 | 8 | -12.4% | 68 | 9 | -9.1% | 69 | 10 | -6.5% | 70 | 11 | -4.4% | 71 | 12 | -2.8% | 72 | 13 | -1.4% | 73 | 14 | -0.3% | 74 | 15 | 0.7% | 75 | 16 | 1.4% | 76 | 17 | 2.1% | 77 | 18 | 2.7% | 78 | 19 | 3.2% | 79 | 20 | 3.6% | 80 | 21 | 4.0% | 81 | 22 | 4.3% | 82 | 23 | 4.6% | 83 | 24 | 4.9% | 84 | 25 | 5.1% | 85 | 26 | 5.3% | 86 | 27 | 5.5% | 87 | 28 | 5.6% | 88 | 29 | 5.8% | 89 | 30 | 5.9% | 90 | 31 | 6.0% | 91 | 32 | 6.1% | 92 | 33 | 6.2% | 93 | 34 | 6.3% | 94 | 35 | 6.4% | 95 | 36 | 6.4% | 96 | 37 | 6.5% | 97 | 38 | 6.6% | 98 | 39 | 6.6% | 99 | 40 | 6.7% | 100 | 41 | 6.7% |
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11-28-2022, 07:10 AM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
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Quote:
Originally Posted by pb4uski
Yeah, that looks about right, actually I get 4.6% at age 82:
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that's (literally) money!
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