Post #663 by rayvt on the Retirement Investing board

Personal Finance Topics / Retirement Investing

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Available annuities are a truly terrible *investment* deal. It is highly unlikely you'll ever get your money back with a positive real return.

However, for someone who is quite old, that isn't really much of an issue...what you want is the tail longevity risk eliminated, not long run investment performance per se.

Schwab has a fixed-income-annuity-calculator.
I entered male age 80, $100,000 investment, start payouts next month.
N.B. For an 80-year-old male in the US, the life expectancy is 8.3 years

Monthly income:
life: $1,330
life, 10 year certain: $962
life w/cash refund of balance: $1,027

$100,000 / $1,330 = 75 months = 6.25 years
$100,000 / $1,027 = 75 months = 8.1 years

Hmmm, that last might be a not unattractive option if you have heirs.

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