Great thread. I understand the appeal of annuities. 2 major issues prevent me from buying an SPIA. — Unplanned/catastrophe financial needs of me or a family member — The lump sum annuity prerequisite would significantly impact my liquidity. — The performance of equities, over my lifetime, has been miraculous — especially domestic stocks. Indexed mutual funds at 60/40 has made retirement possible much earlier and wealthier than I ever imagined. I retired 9 years ago and, despite >4% withdrawals, my portfolio is larger than when I retired. Doesn’t mean it will continue, but hard to ignore the track record that has clobbered annuity returns.
Thanks Jonathan. Last couple months have convinced me it’s time to stop thinking… Am I good enough?
Do I do enough?
Have I got enough? I am enough. BTW, you are, too.
Michael Kitces' (www.kitces.com) summary of the SS decision is driving my decision to wait: Ultimately, the decision to delay Social Security delivers the best results when there is either unexpected inflation, unusually long longevity, or especially bad market returns, which are the exact 3 scenarios that traditional portfolios are the least effective at managing, making the delaying of SS the ultimate anti-fragile "triple hedge"
Always had trouble with the business cycle approach. Dramatic market events on the downside representing stock investment opportunities are driven by outside forces vs. business cycles. The 2007/2008 financial collapse and 9/11 are a couple examples. And, does anyone feel markets will follow a business cycle with such geopolitical turmoil? As Adam recongnizes, nobody can predict market movements -- there are an infinite amount of influences -- business cycle is just one of the many.
I called my insurance company (AMICA) for my auto & home and they assured me my credit rating is checked every year in determining my rates. No sure how to verify that...wondered what others are finding out when they inquire.
Excellent post, Meir. A major influence is AUM - Assets Under Management -- the income driver of the vast majority of financial advisors. A retiree spending their own money conflicts with this business model. Running-out-of-money is the perfect "weapon", sowing the the fear needed, to maximize their income & lifestyle -- not ours.
Jonathan, I see another drawback, if I understand taxes/IRAs/inheritance correctly -- a big "if". Assigning your stock allocation to the Roth (or, a regular IRA), means your bond allocation is in taxable accounts. Therefore, you pay taxes on the income generated from the bonds...that could be avoided on bond holdings in an IRA. Of course, income from bonds, in current investing environment, is microscopic.
Comments
Thanks Jonathan…points well taken. Perhaps bond alternative more accurate…guaranteed income (+) while sacrificing liquidity (-)
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 26, 2025
Great thread. I understand the appeal of annuities. 2 major issues prevent me from buying an SPIA. — Unplanned/catastrophe financial needs of me or a family member — The lump sum annuity prerequisite would significantly impact my liquidity. — The performance of equities, over my lifetime, has been miraculous — especially domestic stocks. Indexed mutual funds at 60/40 has made retirement possible much earlier and wealthier than I ever imagined. I retired 9 years ago and, despite >4% withdrawals, my portfolio is larger than when I retired. Doesn’t mean it will continue, but hard to ignore the track record that has clobbered annuity returns.
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 26, 2025
Thanks Jonathan. Last couple months have convinced me it’s time to stop thinking… Am I good enough? Do I do enough? Have I got enough? I am enough. BTW, you are, too.
Post: Never Enough
Link to comment from February 15, 2025
Dennis is a triple threat: a great writer. a great guy. provides solid advice. I like all his contributions.
Post: In My Absence
Link to comment from April 27, 2024
Michael Kitces' (www.kitces.com) summary of the SS decision is driving my decision to wait: Ultimately, the decision to delay Social Security delivers the best results when there is either unexpected inflation, unusually long longevity, or especially bad market returns, which are the exact 3 scenarios that traditional portfolios are the least effective at managing, making the delaying of SS the ultimate anti-fragile "triple hedge"
Post: Searching for When
Link to comment from December 6, 2023
Always had trouble with the business cycle approach. Dramatic market events on the downside representing stock investment opportunities are driven by outside forces vs. business cycles. The 2007/2008 financial collapse and 9/11 are a couple examples. And, does anyone feel markets will follow a business cycle with such geopolitical turmoil? As Adam recongnizes, nobody can predict market movements -- there are an infinite amount of influences -- business cycle is just one of the many.
Post: Riding the Cycle
Link to comment from October 25, 2023
I called my insurance company (AMICA) for my auto & home and they assured me my credit rating is checked every year in determining my rates. No sure how to verify that...wondered what others are finding out when they inquire.
Post: Credit Where It’s Due
Link to comment from March 23, 2022
Excellent post, Meir. A major influence is AUM - Assets Under Management -- the income driver of the vast majority of financial advisors. A retiree spending their own money conflicts with this business model. Running-out-of-money is the perfect "weapon", sowing the the fear needed, to maximize their income & lifestyle -- not ours.
Post: Retire Those Fears
Link to comment from February 9, 2022
Jonathan, I see another drawback, if I understand taxes/IRAs/inheritance correctly -- a big "if". Assigning your stock allocation to the Roth (or, a regular IRA), means your bond allocation is in taxable accounts. Therefore, you pay taxes on the income generated from the bonds...that could be avoided on bond holdings in an IRA. Of course, income from bonds, in current investing environment, is microscopic.
Post: Paying It Forward
Link to comment from February 2, 2022