Okay financial experts: "Guaranteed lifetime income"

[ABNAK]

So say when retirement comes around you decide to roll your 401K or similar into a fixed "Guaranteed lifetime income" annuity. Charles Schwab, MetLife, etc. The kind where they say "You give us $300K and we'll pay you $1100 a month for as long as you live." Not asking about if it's the best way to retire, just asking this simple question:

Is it really GUARANTEED? i.e. if another Great Depression hits or the holder files bankruptcy, are you screwed or is it really guaranteed?

[Averageman]

I really don't see how it is really possible to guarantee anythings success when it comes to investing.
Sure there are rules and lots of Math to make things look rosy and everything, but a lot of times the market takes an extreme dump based totally on emotion and when that emotion is real no BS fear, all rules go out the window.
My rules for retirement were:
Talk to an accountant.
Get out of the Market before the election.
Pay off my Truck.
Pay off my House.
Have 18 months of cash in a local bank.
It's a real relief to know a feeble minded octogenarian and a sleep her way to the top Socialist have less chance to ruin my life now.

[Diamondback]

Unsure--I'm no finance expert--but by a little quick math if the person in your example has a life expectancy less than 23 years it's not worth it even if the company stays solvent.

And with inflation, that guaranteed benefit WILL lose purchasing power and thus real value.

[Firefly]

So say when retirement comes around you decide to roll your 401K or similar into a fixed "Guaranteed lifetime income" annuity. Charles Schwab, MetLife, etc. The kind where they say "You give us $300K and we'll pay you $1100 a month for as long as you live." Not asking about if it's the best way to retire, just asking this simple question:

Is it really GUARANTEED? i.e. if another Great Depression hits or the holder files bankruptcy, are you screwed or is it really guaranteed?

Those three words just don’t make sense together like that....

[ABNAK]

Those three words just don’t make sense together like that....

That is the definitive answer I'm searching for. Everything I've read on it has a loose definition of "guaranteed". Obviously you'd be buying it from a big-name insurance company, not Joe's Fly-By-Night Investments. BUT......a massive financial downturn, a la depression, could screw you (?). I'm assuming these aren't guaranteed by the FDIC or anything similar. Sure, you'd not be alone in brokeness but that would be of little comfort.

[ABNAK]

On the Charles Schwab website there is a " guaranteed lifetime" annuity calculator. There is an asterisk.

* Guarantees depend on the claims-paying ability and strength of the issuing insurance companies.

It is THAT part that concerns me.

[Firefly]

I’m ready just to bury my money in a box with boobytraps at this point.

How about that?

[HKGuns]

Only one thing in life is guaranteed, death, as stated by Firefly below.

If you are offered a lump sum, take it and hire a private financial advisor to invest it for you or advise.

I'm a finance major and made my own financial decisions for most of my career. When I was within 10 years of retirement I hired a private financial advisor to take over and ensure I was on the right path and to keep me on that path.

As it turns out my biggest problem will be spending the money I have accumulated. But I plan on scaring the heck out of spending every last penny.

[Firefly]

Nothing in life is guaranteed.
.

Dying is. We always got that to look forward to

[lysander]

So say when retirement comes around you decide to roll your 401K or similar into a fixed "Guaranteed lifetime income" annuity. Charles Schwab, MetLife, etc. The kind where they say "You give us $300K and we'll pay you $1100 a month for as long as you live." Not asking about if it's the best way to retire, just asking this simple question:

Is it really GUARANTEED? i.e. if another Great Depression hits or the holder files bankruptcy, are you screwed or is it really guaranteed?

Well, it really depends on the fine print at the bottom of the contract, doesn't it.

What I think that particular program does is if you give them enough money, they figure they an pay you a set amount for "the rest of your life", even given the ups and downs of the market, skimming the excess in the good years, and taking the hit for you in the lean years. In short, you won't get as much as you might just playing the market, but you also avoid the risks (and there is probably no "left-over" after you pass). All that assumes they can stay in business.