Okay financial experts: "Guaranteed lifetime income"

[SteyrAUG]

It is said that Annuities are for dependents of the wealthy that can't be trusted with the principal. For that purpose they make a lot of sense.

Dennis.

But how many places will buy your annuity and cash you out with "money in hand...today....now"? So even that is no guarantee.

[Dennis]

But how many places will buy your annuity and cash you out with "money in hand...today....now"? So even that is no guarantee.

I don't think they get control of it...

[SteyrAUG]

Indeed, 2020 has made me question this (and a lot of things) even more. "It can never happen." Yeah, well.....

I know understand how the depression happened and caught everyone off guard. It simply happened and you were able to manage it or you lost most of what you had.

I thought the 2008 housing market crash was the big "now I understand moment" but really it was 2020. I now get it. Nobody could imagine what it was gonna be like until it was actually happening.

[HKGuns]

Annuities aren't necessarily bad and can be an important PART of an overall investment strategy.

I have some money in one and it is performing wonderfully. Not only do I get a guaranteed rate of return, without principle risk, over a defined period of time, but I get the market movement as well.

Putting everything you have into a single place is bad news. If anyone recommends that to you, run away quickly.

[The_War_Wagon]

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

You got a problem with your buck-ninety-eight a month?

[ABNAK]

Annuities aren't necessarily bad and can be an important PART of an overall investment strategy.

I have some money in one and it is performing wonderfully. Not only do I get a guaranteed rate of return, without principle risk, over a defined period of time, but I get the market movement as well.

Putting everything you have into a single place is bad news. If anyone recommends that to you, run away quickly.

Well I'm a Federal employee and one option I will have (we're talking 5 years down the road when I eject) is to elect to receive installment payments from my TSP from the Feds with no loss of principle guaranteed (the G Fund). I *should* have about $300K and choosing $1100 a month would give me that amount from age 60 to 88. That is not the "Guaranteed Income Annuity" I originally made this thread about; that is different.

The installment payments eventually run out, but unless the Federal government goes tits-up I'm good. The G Fund has a REALLY low rate of return but is guaranteed principle protection. Guaranteed Lifetime Income annuity goes indefinitely but there is that ever-so-slight risk of a big-name company like Schwab or MetLife going under in some future downturn.

While I'm politically conservative I'm very financially conservative, that glass-half-empty thing and very cautious. Safety, even at a lower $$$ amount, is paramount to me.

[ABNAK]

Did some digging around and found out about this:

National Organization of Life and Health Insurance Guaranty Associations (NOLHGA)

Apparently it's like the FDIC, but run by the states with regards to annuities and such. Most states cover up to $250K worth. I assume it means the current balance, not the original. It also covers annuities from accounts with one company, so common sense would dictate (in the case of $300K) buying 3 separate $100K annuities from 3 different companies. Then if they all failed, or only one of them did, you'd be covered because no single one of them exceeded $250K. [if you purchased 3 separate annuities from the same company at $100K each, you'd only be covered for $250 total, since it's the amount per company that is looked at]

Only downside is that it could take months for the legal wrangling of the company's insolvency to be over with and the payments to be resumed.

[26 Inf]

Well I'm a Federal employee and one option I will have (we're talking 5 years down the road when I eject) is to elect to receive installment payments from my TSP from the Feds with no loss of principle guaranteed (the G Fund). I *should* have about $300K and choosing $1100 a month would give me that amount from age 60 to 88. That is not the "Guaranteed Income Annuity" I originally made this thread about; that is different.

The TSP (thrift savings plan?) is in addition to you government retirement, correct? Will you also collect social security?

Does the 'G Fund' allow you to vary the rate of withdrawl from the account? Offer you loans against the amount?

My understanding is that despite all the hand wringing, social security is said to be solvent up to 2037, and after that continue at 75% of the current rates.

(As a bit of a snarky side remark on a subject we've discussed before you childless, heathen you This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman.)

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

So, if I figure correctly you have five years of living on your G retirement and TSP, then social security will kick in (if you are eligible) for about 7 years at full rate and then drop to 75% of that rate when you are 72 if I'm figuring correctly.

What does your wife have?

I nodded and smiled at my plan's financial advisory as he explained how they would allot my money until I ran out at age 95 - then having to subsist on social security. I then set out on my own plan.

I figured that I had 15 years of play left in me - to age 77 - and after that could throttle back substantially. So I adjusted my draw accordingly. This resulted in calls from the financial advisor telling me I was going to run out of money. My ace in the hole: my Army Reserve retirement which I purposely did not disclose during planning.

So in your place, I would want your TSP to bridge the difference in what you were bringing home and what you G retirement will pay until SS kicks in, then throttle back.

I could have kicked at 60 when my TriCare kicked in, but at that point I still looked forward to going to work each day. By 62, thanks to one administrator, the work environment had changed and I punched when I saw that two of my long-term projects were not going anyplace.

Unless you are worried about health, or hate your work environment, maybe a better path might be to work a couple more years, unless you are mandated at 60. My experience was that once I knew I could go, I felt more at ease.

The installment payments eventually run out, but unless the Federal government goes tits-up I'm good. The G Fund has a REALLY low rate of return but is guaranteed principle protection. Guaranteed Lifetime Income annuity goes indefinitely but there is that ever-so-slight risk of a big-name company like Schwab or MetLife going under in some future downturn.

While I'm politically conservative I'm very financially conservative, that glass-half-empty thing and very cautious. Safety, even at a lower $$$ amount, is paramount to me.

Buddy, at this point we are all kind of in this together, if the government or economy either one folds, at our ages we'll have bigger things to worry about than how much money we have.

[ABNAK]

The TSP (thrift savings plan?) is in addition to you government retirement, correct? Will you also collect social security?

Does the 'G Fund' allow you to vary the rate of withdrawl from the account? Offer you loans against the amount?

My understanding is that despite all the hand wringing, social security is said to be solvent up to 2037, and after that continue at 75% of the current rates.

(As a bit of a snarky side remark on a subject we've discussed before you childless, heathen you This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman.) Yeah yeah

https://www.ssa.gov/policy/docs/ssb/...v70n3p111.html

So, if I figure correctly you have five years of living on your G retirement and TSP, then social security will kick in (if you are eligible) for about 7 years at full rate and then drop to 75% of that rate when you are 72 if I'm figuring correctly.

FERS pension (which isn't shit), TSP, SS, and VA. Piece it all together and I can punch out at 60 with an increase two years later when I hit 62 and take the early SS. Then at 65 a slight drop when I get Medicare deducted (not sure about that part though, as I can keep my Federal BCBS into retirement at current-employee rates so may not have to buy anything past Medicare Part A). Yes, if SS drops to 75% I'll be 72 in 2037.

Wife makes more than me but is 5 years younger so will work 5 years longer. She too will have FERS, TSP (more than mine because we're about the same now so she'll have maybe $100K more by then), SS (which will also be more due to what she makes), but no VA.

It won't be a Club Med retirement but we won't be eating canned dog food either! House will be paid off in a little over 2 years from now, so mortgage won't be an issue. We currently have 3 vehicles but when I retire there won't be a need for that so one vehicle payment gone too.

[TehLlama]

What is the money going to get spent on? On what, and when - that's what matters.
Just invest it yourself, information is plentiful, diversification is still the answer.
My cheapskate answer is go with low load (or no load) whole market funds indexed to that. If housing is going to be a large cost, REITs make sense, going with diversified healthcare and tech has been solid for me, countercyclicals also make some sense. Ironically, muni bonds still make a limited amount of sense, just because of the tax advantages, but the rating on those is always suspect, just treat them like other investments and it can make sense just because the low returns post-tax are actually somewhat useful.

For my part trying to do a half-assed FIRE plan, this is basically the mindset - but my intention is to get to the 'fk you' money stage, then proceed to keep working because I enjoy what I do, but doing it from a position of knowing I can walk out the door and never be troubled to look back sounds great.