mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Interesting use of FireCalc in this article.
In other words~"You're correct, but we're still going to sell the hell out of this crap."
The High Cost of a Guaranteed Income - Registered Investment Advisor
So what happens when you consider market volatility?
Investors may die broke.
Using Firecalc, an online simulation calculator, I found that a $100,000 portfolio with an expected return of 8 percent, expenses of 3.1 percent (calculated using the methodology described on the Fidelity website), and a 5 percent of original investment withdrawal would often run out of money before 30 years.
How often? It depends, but under each scenario there was a significant chance of ending with zero.
Even if it is only a chance event, that’s a long way from the $84,706 shown so positively by the Fidelity online calculator. The important fact here is that any calculator that includes market volatility will reveal materially worse results than the static model Fidelity uses on its website because market volatility always has a cost.
a spokesperson for the Fidelity Annuities group said: “I wouldn’t disagree with any of your points. But I do think these products play a role in providing lifetime income.”
In other words~"You're correct, but we're still going to sell the hell out of this crap."
The High Cost of a Guaranteed Income - Registered Investment Advisor