2B, interesting answer! I will post 1 or 2 of the articles I read soon. I wish there was an instructional article that would show, in detail, how to construct your own annuity type investment. Is it as simple as laddering fixed income products?
It's really pretty simple if you are willing to go to all of the trouble. Say you want $12,000 per year. You start at age 70 and figure you'll be dead or nearly so by 90. You would plug in a interest rate for the bonds with maturities over the next 20 years. If the interest rate was 5%, you'd buy $150,000 in $1,000 bonds. At the end of year 1 you would receive $7,500 in interest. You would then have to have another $5,000 in bonds maturing. So the payout at the end of year 1 would be $12,500 and you would have $145,000 in bonds left. Year 2 would generate $7,250 in income and you'd have to have another $5,000 in bonds mature so the payout at the end of year 2 would be $12,250. This would continue with the extra payout eventually being recovered in later years by collecting less than $12,000. All-in-all, it would work.
In the real world there would be a yield curve with the rates increasing as maturities became longer. If you plug those rates into Excel, you could quickly calculate the bonds needed at each maturity.
An easier way would be to use zero coupon bonds. The interest rate would be lower since these are government bonds but then the security is higher. There you'd just buy $12,000 in zero coupon bonds for each year of your self-annuity. For tax reasons, you'd want these in an IRA.
This does not give you "longevity insurance" since your ladder will run out while the SPIA would pay if you lived forever and the insurance company remained solvent. The secret is to buy enough extra years where you feel comfortable you won't live that long. Go for 110 if you feel lucky.
The benefits of self-annuitizing is that if you need a surge of money for long term care it is available. Getting $1000 per month from a SPIA won't help much if you don't have the assets to get into a decent LTC facility. Medicaid would take your $1000 and you'd still be in the ward with the other indigents.