nowayout wrote:Am I over thinking this? $180,000 divided by 240 months (20 yrs) gives him $750 a month. That is zero interest on that money. Does a simple investment into a safe fund make better sense? Something like DBR mentioned above, 60 stocks 40 bonds.
60/40 (also I think I suggested 40/60) isn't safe in the sense of the way too simple arithmetic you have done above.
The simplest analysis of this problem has to be at least as complicated as this model:http://www.firecalc.com [link typo fixed by admin LadyGeek]
Try out some scenarios and study the output that shows how the outcome can vary under different possible circumstances.
The way in which 40/60 is the safest alternative is that less than 40% has even more chance of running out of money depending on the withdrawal rate and time expected to be concerned.
An SPIA is the "safest" except that inflation needs to be taken in account.
I don't think there is a enough money here to support the desired income with high assurance of not running out of money and still being alive.