I've looked at annuities quite often. Obviously the draw is getting a consistent check and initially the payment amount looks good. They I start looking at the numbers on a spreadsheet and what inflation does to it 10 and 20 years down the road. Not so good.

You'd likely do better with a conservative 20/80 or 30/70 portfolio. Or buy a 10 or 20 yr treasury. Get less money but it will still be there in 10 or 20 years and then you might be in your 80s and can get an annuity if you need to.

About the only time I could see it possibly working out is if interest rates rose high and the payouts got much higher and then interest/inflation dropped back to normal levels for the rest of the time.

I have a relative in his 80s who has done well with investments and for some reason he buy a number of annuities over the years and is happy with them but I'm not sure why. He doesn't need the money. I think most/all of his RMDs go directly to charities. He also has a nice pension so that coupled with social security and an exceptionally low expenses except for his gambling (a set amount per month).

I was quite close to my grandparents and spent many a weekend night with them and my uncle (at times he lived at home). When his father passed away he moved back home (house was purchased in the 1930s) and continues to live there. I didn't see him much as I moved away and hadn't been in the house for probably 20 years or longer. I took my wife there to see it and it hadn't changed from what I remember as a teenager (I'm retired now). Now he takes care of it in the sense it doesn't have water issues, structural/plumbing issues but the carpet is completely worned out, the kitchen is 40-50 years old, etc. As long as he has his tv to watch sports he is happy. And he enjoys eating out 2 times a day the majority of the time (keeps his weight in control).

Different strokes for different folks but I agree on the annuity.

Retirement Investing FAQ

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