Open a HELOC and use it to invest in stocks. This can be a “twofer.” In a 2008 type of market you can lose your home and a large portion of your portfolio.
Most people only have Social Security as a source of guaranteed income, myself included. At the age of 63 two years ago l decided supplementing that with annuity income that will start at age 68 would be a good way to cover the essential expenses. No frills just a deferred income annuity from a highly rated insurer.
Erisa protections usually follow the 401k into the IRA. Your old 401k may switch providers (e.g. Go from Fidelity to Voyager.) You have no control over that. 65 basis points is a bit high. You could easily get those costs down close to zero in an IRA.
The exception I’ve seen are Mom and Pop who realize a nice gain on their home and, because the exclusion didn’t cover the entire gain, end up on the wrong side of IRMAA. The exception are those folks for whom much of their net worth is tied to the home. They’ll come in the following year and complain their Social Security income went down…
Great to do the comparison with the COLA. I purchased a DIA (SPIA that pays out at a later date) w/o a COLA. Logic being the Social Security pymt has a COLA and the bulk of the assets (the portfolio) should provide an inflation hedge. The breakeven point as you point out, is down the road a
long while.
Your Social Security is inflation adjusted and having an investment pool that includes stocks, bonds including TIPs, REITs will help with inflation. You can buy an inflation adjustment on an income annuity but I personally didn’t like the numbers. Too much to go into here.
The mortality credits are one reason. Imagine buying an income annuity with 1/10 of your money for say $100k at age 65. Yearly income is around $7,300. If you live to be 95 it is still paying. It’s a form of longevity insurance. It’s only for a small portion of your money. The rest is invested. Adding say a 20 year guarantee ensures if you get hit by a bus after one payment, heirs get paid for 19 years and 11 months. I used one just to ensure essential expenses were covered by guaranteed income.
For many folk’s Immediate Annuities are a good deal. Add up your monthly non discretionary expenses, subtract existing guaranteed forms of income you’ll receive in retirement. If there’s a shortfall plugging it with an immediate annuity (with or without an inflation adjustment) might make sense. It did for me,
Nice article. Thank you. Being wealthy, to me at least, just affords a person the ability to relax a little bit. It certainly doesn’t mean flashing the fancy cars and having bragging rights to the latest big vacation. We live in a well off suburb on the coast south of Boston. Being semi retired and also being somewhat wealthy it is nice to just be to throw on jeans, play E Street radio all day and go out to dinner whenever the urge strikes. We drive fairly old cars (10 years) just because we tend to hold onto them. Funny, we’ve had to have them towed a couple of times recently. I told my wife that I wonder if the neighbors are worried about our financial situation. I was attracted to this site initially when I saw I saw that Jonathan Clements developed it. I’ve got his “ Getting Going” articles bookmarked from the WSJ. Always appreciated his wisdom and insight. My best to him right now.
Comments
Service Advisors at dealerships work on commission. They’re not on your side.
Post: The Repair I Didn’t Need
Link to comment from November 6, 2026
Open a HELOC and use it to invest in stocks. This can be a “twofer.” In a 2008 type of market you can lose your home and a large portion of your portfolio.
Post: Financial Ruin for Beginners
Link to comment from October 7, 2026
Most people only have Social Security as a source of guaranteed income, myself included. At the age of 63 two years ago l decided supplementing that with annuity income that will start at age 68 would be a good way to cover the essential expenses. No frills just a deferred income annuity from a highly rated insurer.
Post: Is now the time for an annuity?
Link to comment from October 3, 2026
Erisa protections usually follow the 401k into the IRA. Your old 401k may switch providers (e.g. Go from Fidelity to Voyager.) You have no control over that. 65 basis points is a bit high. You could easily get those costs down close to zero in an IRA.
Post: Consolidating 401(k)s in retirement
Link to comment from January 6, 2026
The exception I’ve seen are Mom and Pop who realize a nice gain on their home and, because the exclusion didn’t cover the entire gain, end up on the wrong side of IRMAA. The exception are those folks for whom much of their net worth is tied to the home. They’ll come in the following year and complain their Social Security income went down…
Post: Enough with IRMAA complaining
Link to comment from December 30, 2025
Great to do the comparison with the COLA. I purchased a DIA (SPIA that pays out at a later date) w/o a COLA. Logic being the Social Security pymt has a COLA and the bulk of the assets (the portfolio) should provide an inflation hedge. The breakeven point as you point out, is down the road a long while.
Post: Please Sir, Can I Have Some More?
Link to comment from December 23, 2025
Your Social Security is inflation adjusted and having an investment pool that includes stocks, bonds including TIPs, REITs will help with inflation. You can buy an inflation adjustment on an income annuity but I personally didn’t like the numbers. Too much to go into here.
Post: RDQ Sorry folks, I still see annuities, including deferred annuities, as a viable option for creating steady retirement income.
Link to comment from April 24, 2025
The mortality credits are one reason. Imagine buying an income annuity with 1/10 of your money for say $100k at age 65. Yearly income is around $7,300. If you live to be 95 it is still paying. It’s a form of longevity insurance. It’s only for a small portion of your money. The rest is invested. Adding say a 20 year guarantee ensures if you get hit by a bus after one payment, heirs get paid for 19 years and 11 months. I used one just to ensure essential expenses were covered by guaranteed income.
Post: RDQ Sorry folks, I still see annuities, including deferred annuities, as a viable option for creating steady retirement income.
Link to comment from April 24, 2025
For many folk’s Immediate Annuities are a good deal. Add up your monthly non discretionary expenses, subtract existing guaranteed forms of income you’ll receive in retirement. If there’s a shortfall plugging it with an immediate annuity (with or without an inflation adjustment) might make sense. It did for me,
Post: RDQ Sorry folks, I still see annuities, including deferred annuities, as a viable option for creating steady retirement income.
Link to comment from April 24, 2025
Nice article. Thank you. Being wealthy, to me at least, just affords a person the ability to relax a little bit. It certainly doesn’t mean flashing the fancy cars and having bragging rights to the latest big vacation. We live in a well off suburb on the coast south of Boston. Being semi retired and also being somewhat wealthy it is nice to just be to throw on jeans, play E Street radio all day and go out to dinner whenever the urge strikes. We drive fairly old cars (10 years) just because we tend to hold onto them. Funny, we’ve had to have them towed a couple of times recently. I told my wife that I wonder if the neighbors are worried about our financial situation. I was attracted to this site initially when I saw I saw that Jonathan Clements developed it. I’ve got his “ Getting Going” articles bookmarked from the WSJ. Always appreciated his wisdom and insight. My best to him right now.
Post: I don’t feel comfortable being “wealthy”
Link to comment from April 1, 2025