Annuity explanation for Chuck

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The Wizard
Posts: 10911
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Annuity explanation for Chuck

Post by The Wizard » Wed Oct 11, 2017 5:00 pm

Excerpted from a locked thread:

Wed Oct 11, 2017 4:14 pm
The Wizard wrote: ↑

But I'm all in favor of having large pension and/or annuity income each month in retirement as well.
But I only do Immediate Annuities.
When I throw the switch on another $100K at TIAA, the additional income starts the following month...

Hi Wizzard, I would like to better understand your post but I cannot figure out what you mean when you say ...

"When I throw the switch on another $100K at TIAA, the additional income starts the following month..."

If you see this and would like to explain it I would be interested.


What I meant was:
I have a good sized tax deferred 403(b) accumulation with TIAA from 40+ years of employment.
I annuitized a portion of it for lifetime income when I retired at age 63 in 2013.

My remaining 403(b) balance at TIAA continues to grow with market returns. I can withdraw additional money from it for additional taxable income if I choose.
Or I can just leave it alone until RMDs need to start in 2020.

For various reasons, I chose to "annuitize" around $100,000 of that accumulation this past May, thus getting an additional $7000+ income per year.
I found the Payout Rate of just over 7% to be agreeable at my age 67.
This was an "immediate" annuitization in that additional income started hitting my checking account the month after paperwork was completed...
Attempted new signature...

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