What percentage of your assets have you annuitized / do you plan to annuitize ?

[obgyn65]

I was reading the key findings of this article last night. http://www.ebri.org/pdf/briefspdf/EBRI_IB_05-2011_No357_Annuities.pdf

Would be interested to know what percentage of your assets have you annuitized / do you plan to annuitize. Sorry, I don't know how to create a survey on this website.

 

[MichaelB]

I don't have an annuity or any plans for one.

 

[REWahoo]

My annuity is Social Security.

 

[frayne]

My annuity is Social Security.

Ditto !

 

[W2R]

My annuity is Social Security.

+1 (Or, at least it will be once I have claimed SS). Plus, I have a very small pension. I have no plans to buy any further annuity for now.

Perhaps when I am in my 80's I might buy an immediate lifetime annuity with less than 1/4 of my portfolio. The objective of this would be to simplify the income needed for my most basic expenses, in case I live to a very very old age and in case I become less mentally competent. At that age, the cost should be much lower and maybe interest rates will have rebounded by then.

 

[HpRyder]

Social Security is my only annuity. I don't particularly trust the insurance companies to give them that much money. Besides I'd rather get more money by doing my self and leaving an estate than getting less money and having no estate to leave.

 

[justplainbll]

When dictated by my spending requirements, I plan to annuitize the portion of my portfolio that amounts to 1 / (100 - age). For example, at age 70 I'd be comfortable cashing in 3.33% of my investments.

 

[braumeister]

+1 (Or, at least it will be once I have claimed SS). Plus, I have a very small pension. I have no plans to buy any further annuity for now.

Perhaps when I am in my 80's I might buy an immediate lifetime annuity with less than 1/4 of my portfolio. The objective of this would be to simplify the income needed for my most basic expenses, in case I live to a very very old age and in case I become less mentally competent. At that age, the cost should be much lower and maybe interest rates will have rebounded by then.

That's exactly my situation and plan.

 

[obgyn65]

I like this idea and will likely do something along the same lines.

The objective of this would be to simplify the income needed for my most basic expenses, in case I live to a very very old age and in case I become less mentally competent.

 

[obgyn65]

The problem in my case is that I have spent half my life working abroad, therefore my SS benefits will be greatly reduced.

My annuity is Social Security.

 

[obgyn65]

I like this idea too. Thanks for sharing.

This is why I keep coming back to this website. I have been learning so much from everyone.

Thank you.

When my dictated by my spending requirements, I plan to annuitize the portion of my portfolio that amounts to 1 / (100 - age). For example, at age 70 I'd be comfortable cashing in 3.33% of my investments.

 

[frank]

my sil took out a 15 year immediate annuity. I looked at the parameters of the annuity and penciled it out, when it was all said and done she was getting 0.8 percent on her money. I would think even in todays economy you could do better than that. annuities are only good for the insurance companies.

 

[Ed_The_Gypsy]

My plans are about the same as most of the above.

Be aware that the IRS imposes a MWR (minimum withdrawal rate) after a certain age (72?) from traditional IRAs and 401Ks according to the table used for 72t withdrawals. Every year thereafter, the MWR is 1/current life expectancy in years and changes every year. Vanguard will automatically calculate this at the end of every year and send you a check. Basically, you are forced to annuitize your IRA.

If I live so long, I expect to get a larger payout than I need after a while, so it will have to go into a holding account of some kind.

 

[MichaelB]

The problem in my case is that I have spent half my life working abroad, therefore my SS benefits will be greatly reduced.

SS eligibility requires a minimum of 10 years (40 credits) and I have 14, as I spent almost all of my time working abroad. Even more extreme, 7 were earned while I was in high school / college / grad school, so the income levels are low, as will be my SS pension. For me this is not a problem because I had opportunities to save, and like you, if I want an annuity I can buy one. While I have no plans to do so, this is a good idea

Perhaps when I am in my 80's I might buy an immediate lifetime annuity with less than 1/4 of my portfolio. The objective of this would be to simplify the income needed for my most basic expenses, in case I live to a very very old age and in case I become less mentally competent. At that age, the cost should be much lower and maybe interest rates will have rebounded by then.

 

[obgyn65]

Please could you give more specifics ? What were the fees for example, or how old is your SIL ?

my sil took out a 15 year immediate annuity. I looked at the parameters of the annuity and penciled it out, when it was all said and done she was getting 0.8 percent on her money. I would think even in todays economy you could do better than that. annuities are only good for the insurance companies.

 

[MichaelB]

If I live so long, I expect to get a larger payout than I need after a while, so it will have to go into a holding account of some kind.

Gypsy Ed, feel free to give me a call - I'll help you spend it ...

 

[frank]

I really didn't consider any fees. she put in a certain amount and got so many dollars a month for 15 years. when you figured the total return for the annuity it turned out at .08 percent. it did have the death benefit, but other than that it was pretty straight forward. my sil is 65.

 

[Ed_The_Gypsy]

Mike, bring a couple of Polars and we'll talk about it!

 

[MichaelB]

Mike, bring a couple of Polars and we'll talk about it!

Now we're talkin'

 

[donheff]

My Federal Pension is my annuity. It accounts for about 50% of our planned ER spending. We discount DWs SS, viewing it as an offset for higher taxes as we get toward RMDs. But it will also be a stable annuity like source of income and definitely a source of security. DW and I could get by OK on my pension and her SS. If I had no pension I would probably annuitize about 1/3 of my portfolio for peace of mind.

 

[scrabbler1]

+1 (Or, at least it will be once I have claimed SS). Plus, I have a very small pension. I have no plans to buy any further annuity for now.

SS and my frozen company pension are two of my "reinforcements" I will be able to access when I am in my mid-60s, just over 15 years from now.

 

[Alan]

My annuities are also in the form of pensions and, in the future, SS (DW and I). I do like the "security blanket" feeling of those monthly checks coming in to cover our basic living needs, although the pensions are not COLA'ed and currently cover about 70% of our spending.

I think I would buy SPIA annuities to cover the basics if I didn't have the pensions.

 

[obgyn65]

Sorry, I don't get it. Remember I don't work in finance so please be patient with me... If I enter "Female", 65 years, $100,000 (as an example) on this website Immediate Annuities - Instant Annuity Quote Calculator. I get $674 (about 8%) Guaranteed Income for a 15-Year Period Certain Only. Are you saying that your SIL got 0.08%, or did she get 8% ? Is it net or gross ? Is it paid monthly?

it turned out at .08 percent. my sil is 65.

 

[rescueme]

At the time of my retirement (age 59), we annuitized 10% of the value of our joint retirement portfolio value through an SPIA, to provide us with a base income, that was not influenced by the varience of the market.

Almost five years later in retirement, I would say (for us) it was one of the "smart" financial decisions in our lives.

For us, it was the fact that I retired early (at least earlier than most) without a pension, and with the decision to delay SS till age 70 - an eleven year span.

This allows me to delay SS till age 70, thus maximize my DW's survivor benefits, allow me to accumulate an increase in SS by 8%/year (in addition to any COLA's during that period) from ages 66-69, and be able to claim against DW's benefit at age 66 at a 50% rate (we're the same age). BTW, that will be a "superior annuity", COLA adjusted, and our current SPIA? Just added as additional income stream.

I'll be the first to say that an annuity is not for everybody; you need to have a reason (well thought out) to persue such an action. Part of the decision was made by running different scernieos through the use of various (free) forcast models, such as FireCalc, RIP (Fidelity), and FE (Vanguard) to see if the option would be applicable to your personal situation. In our case (only), the addition of the SPIA greatly increased the return, and the viability of our personal plan.

BTW we have no regrets, and will seriously consider additional SPIA income streams as we age...

 

[rescueme]

having no estate to leave.

That's not true, depending on the availability of options of the annuity.

DW/me have a joint SPIA. If we both pass before the "life period" contracted for, the remainder payments go to our estate/beneficiary.

BTW, if we live longer than calculated? Payments continue (at 100%) till we're both gone, resulting in a higher calculated ROI.