One way to get guaranteed income in retirement

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One way to get guaranteed income in retirement

Postby gkaplan » Fri Jul 26, 2013 8:43 am

Vanguard's website has a column on immediate fixed annuities.

https://personal.vanguard.com/us/insights/article/annuity-income-retirement-072013
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Re: One way to get guaranteed income in retirement

Postby mhalley » Sat Jul 27, 2013 12:58 am

Ran some numbers as I am considering retiring soon, looks like there is a 2% fee for the annuity they are selling. Fidelity ran about $50 less a month for theirs, but didn't see the fee on their preilminary projections. Is 2% about avearge for one of these types of annuitys or can you do better elsewhere?
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Re: One way to get guaranteed income in retirement

Postby Retread » Sat Jul 27, 2013 9:16 am

mhalley wrote:Ran some numbers as I am considering retiring soon, looks like there is a 2% fee for the annuity they are selling. Fidelity ran about $50 less a month for theirs, but didn't see the fee on their preilminary projections. Is 2% about avearge for one of these types of annuitys or can you do better elsewhere?
Mike

You're reading it wrong. The quote reflects a 2% commission. The only thing Vanguard is doing is disclosing their compensation, unlike most other agents.
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Re: One way to get guaranteed income in retirement

Postby nedsaid » Sat Jul 27, 2013 9:34 am

This is something that I will consider when the time comes to retire. There are a lot of things to consider.

There are annuities you can buy that give you cost of living raises but it cuts your monthly payment quite a bit. So if you get the immediate annuities without inflation protection, in effect you are getting your inflation adjustments in advance. So there are no easy answers on what to do.

I am thinking about an immediate annuity with a 10 year certain in case of my early demise. But I am 54 and there is a lot of time before I have to start thinking about this.

At least using the Vanguard service, you get a more objective view of your options. I suppose one could go to an insurance broker.

Not sure what I will actually do, but it is one tool in the toolkit.
A fool and his money are good for business.
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