With this year’s inflation rate over 8%, why would you lock in a low fixed rate annuity? Are you receiving payments on these annuities?
Cash is king at the moment, and equity risk is off the charts high.
We're starting year 4 of ER, and I was able to pay for the first 3 years entirely with dividends from CDs.
MYGA rates are currently higher than any CD you can get. If INCOME is what you want, MYGAs are the way to go.
Personally, all I care about is income. I'm the past the stage of "needing" growth, but I sure need income. And predictable, guaranteed income sure beats selling assets that have dropped 20+%. That's not income.
Equity (and Bond) Growth is not assured, and in fact, as we've seen so far this year, you can easily wind up with huge drops in the value of your portfolio in a very short span of time.
Income is predictable and can be assured.
It's really just as simple as that. I'll take income any day of the week over RISK in the markets at this point in our retirement journey.
In fact, if we get back to SPX 4,800 or higher, I'll likely drop down to 10% equities or less, and 90+% fixed income with a guaranteed coupon. I don't really care that I'm "losing purchasing power" because the math works through end of life, as long as the income keeps coming in. And I'm not trying to get "more". I'm just planning to get "enough" to live comfortably, which predictable, guaranteed income facilitates.
ETA: it's odd that we build equity/bond portfolios with the goal of getting a 3-4% SWR yet entails taking huge risk. Anyone can get 3-4% GUARANTEED today with zero risk. Sure..that may not be the case 5 years from now..but 5 years from now wife and I will be both be pulling SS and can take more risk. But the risk now is off the charts high, AND I can GUARANTEE 3.5 - 4% SWR with no loss of principal. Pretty compelling, IMHO.