Personal Investments • Why do people buy annuities?

The spia doesn’t go up in payments over time. The “4% rule” includes adding inflation every year.

Late 80s I’ll take the inflation risk. 60s I’ll take 4% rule.

I recall couple of studies showing around age 80 is the optimal time for buying an SPIA if you're going to. Less inflation/default risk, and your remaining lifespan can be projected with more accuracy than when younger. You can also judge, based on portfolio size, if you're going to *need* an annuity at that age.

The studies that I have read show that commercial annuities are actuarially neutral for purchase age, unlike social security which pays to wait.

SS is actuarially neutral, unless you have a spouse.

Statistics: Posted by Harmanic — Sat Sep 28, 2024 9:35 pm — Replies 250 — Views 21844