No Inflation-Adjusted SPIAs at Vanguard

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
User avatar
grayfox
Posts: 4932
Joined: Sat Sep 15, 2007 4:30 am

No Inflation-Adjusted SPIAs at Vanguard

Post by grayfox » Thu Feb 02, 2017 12:06 pm

:!: No Inflation-Adjusted Annuity at Vanguard!

Vanguard has price quotes from 5 insurance companies:

Company (Moody's, S&P, A.M. Best)
Symmetry (A2, A, A)
AIG (A2, A+, A)
Mutual of Omaha (A1, AA-, A+)
Lincoln Financial Group (A1, AA-, A+)
Principle (A1, A+, A+)

For Single-Life Only Annuity: 3 quoted prices. 2 No Quote.
Prices vary -4.57% to +2.70% from average of 3 prices.

For Single-Life Only with 3% Annuall Increase: 3 quoted prices. 2 No Quote.
Prices are +42.45% to +44.19% greater than Single-Life Only.

For Single-Life Only with CPI-U Adjustment: 0 quoted prices. 5 No Quote.

:?: Are Inflation-Adjusted Annuities going away?

So much for that idea.

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by itstoomuch » Thu Feb 02, 2017 12:17 pm

Why would you want an inflation adjusted SPIA ?
Wouldn't a variable annuity that beats inflation be better :idea: ?
We are talking about Income from annuities, are we not :?: ?
So what is wrong with Vanguard's branded VA's?
YMMV
Last edited by itstoomuch on Thu Feb 02, 2017 12:19 pm, edited 1 time in total.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

User avatar
nisiprius
Advisory Board
Posts: 36457
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by nisiprius » Thu Feb 02, 2017 12:19 pm

It might vary by state. New York in particular is often an outlier. I don't want to go through the exercise fifty times but, just for laughs, let me pick a state more or less at random... how about Michigan?

Hmmm... interesting... Heuler Income Solutions has definitely revamped their website's visual design... and, yes, I'm seeing the same thing. "No quote" from any of them in Michigan. Bummer.

3%-annual-compounded-increases are still available.

Image

Rep at 800-523-0830 was unaware of the situation, thought that inflation-adjusted SPIAs had still been showing on the website as of just a few days ago, and says he'll message me when/if he learns more.
Last edited by nisiprius on Thu Feb 02, 2017 12:39 pm, edited 2 times in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

User avatar
nisiprius
Advisory Board
Posts: 36457
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by nisiprius » Thu Feb 02, 2017 12:22 pm

itstoomuch wrote:Why would you want an inflation adjusted SPIA ?
Wouldn't a variable annuity that beats inflation be better :idea: ?
We are talking about Income from annuities, are we not :?: ?
YMMV
Tell me the name of the variable annuity that guarantees it will beat inflation when you convert it from the accumulation phase to the income phase.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

User avatar
David Jay
Posts: 5436
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by David Jay » Thu Feb 02, 2017 12:29 pm

I am impressed that a 3% annual is only 40-some percent more than a fixed payout. What age did you use?

Rule of 72 suggests that the payout doubles in 24 years.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by itstoomuch » Thu Feb 02, 2017 12:36 pm

^ @Nisiprius, no VA or FI annuity will or can guarantee inflation protection for a long period, unless the Insurance company either severely discounts the product's premium or offers such with a large option fee.

Even in GLWB annuities, you are paying a substantial option fee for limited Income protection. We are paying 1%, with the annuity company not happy with the deal (2008-2102). Newer annuities are charging 2% and possibly more for less income protection.

If one can find an annuity with inflation protection, I would be interested. In the meantime, I'll always try to beat inflation and reinvest. :annoyed
YMMV
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

User avatar
nisiprius
Advisory Board
Posts: 36457
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by nisiprius » Thu Feb 02, 2017 12:41 pm

itstoomuch wrote:^ @Nisiprius, no VA or FI annuity will or can guarantee inflation protection for a long period, unless the Insurance company either severely discounts the product's premium or offers such with a large option fee.

Even in GLWB annuities, you are paying a substantial option fee for limited Income protection. We are paying 1%, with the annuity company not happy with the deal (2008-2102). Newer annuities are charging 2% and possibly more for less income protection.

If one can find an annuity with inflation protection, I would be interested. In the meantime, I'll always try to beat inflation and reinvest. :annoyed
YMMV
I own two SPIAs that have such a guarantee, so please don't tell me nobody can do it.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by itstoomuch » Thu Feb 02, 2017 12:43 pm

Like I said, I'd be interested.
PM me for product/company.
thanks
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

User avatar
grayfox
Posts: 4932
Joined: Sat Sep 15, 2007 4:30 am

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grayfox » Thu Feb 02, 2017 12:45 pm

itstoomuch wrote:Why would you want an inflation adjusted SPIA ?
Wouldn't a variable annuity that beats inflation be better :idea: ?
We are talking about Income from annuities, are we not :?: ?
So what is wrong with Vanguard's branded VA's?
YMMV
These discussion is only about Guaranteed Income, which would be used as the Income Floor for Floor + Upside retirement funding plan. A Variable Annuity, which is not guaranteed, could only be for Upside Income.

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by itstoomuch » Thu Feb 02, 2017 12:53 pm

^We have 8 GLWB variable and fixed-income annuities. They all have a limit to the amount of income and time length.
Last edited by itstoomuch on Thu Feb 02, 2017 3:18 pm, edited 1 time in total.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

User avatar
grayfox
Posts: 4932
Joined: Sat Sep 15, 2007 4:30 am

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grayfox » Thu Feb 02, 2017 1:04 pm

David Jay wrote:I am impressed that a 3% annual is only 40-some percent more than a fixed payout. What age did you use?

Rule of 72 suggests that the payout doubles in 24 years.
If you were 100% certain that inflation was going to be 3%, how would you price $1,000 p.m. + 3% Adjustment, compared to fixed $1,000 p.m.? Suppose Male / Female, aged 60. Life Expectancy = +21.3 / +24.3 years

Here are the two cashflows. Male goes to 81.3. Female to 84.3
How much should you pay for each one?

Code: Select all

Age  Fixed        +3% Adjustment
60	$12,000.00	$12,000.00
61	$12,000.00	$12,360.00
62	$12,000.00	$12,730.80
63	$12,000.00	$13,112.72
64	$12,000.00	$13,506.10
65	$12,000.00	$13,911.28
66	$12,000.00	$14,328.62
67	$12,000.00	$14,758.48
68	$12,000.00	$15,201.23
69	$12,000.00	$15,657.27
70	$12,000.00	$16,126.99
71	$12,000.00	$16,610.80
72	$12,000.00	$17,109.12
73	$12,000.00	$17,622.39
74	$12,000.00	$18,151.06
75	$12,000.00	$18,695.59
76	$12,000.00	$19,256.46
77	$12,000.00	$19,834.15
78	$12,000.00	$20,429.17
79	$12,000.00	$21,042.05
80	$12,000.00	$21,673.31
81	$12,000.00	$22,323.51
82	$12,000.00	$22,993.22
83	$12,000.00	$23,683.02
84	$12,000.00	$24,393.51
:?: Question: If CPIU-Adjusted SPIA is not available, is it worth spending 43% more for +3% Annual Increase?

The Wizard
Posts: 12151
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by The Wizard » Thu Feb 02, 2017 2:24 pm

It's easy enough to do modest additional annuitizations every so often to combat inflation.
In fact, that's what I'm planning myself for later this year, four years into retirement.
With TIAA, I'll be doing a combination fixed (Trad) and variable (TREA) annuitization which will put an additional $600/month gross into the ole hopper.

Note: in this case, my existing fixed and variable annuities from 2013 have dealt with inflation nicely, with monthly income increasing 15.8% since May, 2013. So the additional thing is more of a midcourse adjustment...
Attempted new signature...

User avatar
grayfox
Posts: 4932
Joined: Sat Sep 15, 2007 4:30 am

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grayfox » Thu Feb 02, 2017 2:40 pm

The Wizard wrote:It's easy enough to do modest additional annuitizations every so often to combat inflation.
In fact, that's what I'm planning myself for later this year, four years into retirement.
...
The simplest solution is a CPIU-Adjusted SPIA. That is close to making one decision now and you are done.
But if CPIU-Adjusted SPIA is not available, or too expensive, then other approaches will be necessary.

One approach is your solution, i.e. additional annuitizations over time.
But how much and how often? Periodically, like every 5 or 10 years, or based on actual CPIU, or based your actually budget or expenses?
So that's not really one simple solution, but many alternate solutions with many decisions in the future.
It sounds like every year you would have to examine your income vs. your budgeted expenses, and decide if you should purchase additional income or not.

Yet another approach is consider how much personal inflation you expect, say 2-3%, and purchase a SPIA with a fixed 2% or 3% adjustment.
Then additional annuitizations would only be required if your inflation exceeded the adjustment.
But, again, it depends on how much extra it costs for the annual 2% or 3% increase.

User avatar
Sheepdog
Posts: 5138
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by Sheepdog » Thu Feb 02, 2017 2:51 pm

Just for possible interest for some of you. What was my inflation in my 18 years in retirement? Income tax is ignored. In our 1st 5 full years retired (1999-2003) we spent or gave away an average of $57,850 per year. In our last 5 years (2012-2016) we spent or gave away an average of $62,279. (same house and 2 autos)
Last edited by Sheepdog on Thu Feb 02, 2017 2:56 pm, edited 1 time in total.
It's not what you gather, but what you scatter which tells what kind of life you have lived---Helen Walton

User avatar
bobcat2
Posts: 5221
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by bobcat2 » Thu Feb 02, 2017 2:56 pm

When I checked the Vanguard Income Solutions portal about 10 days ago one company, I think it was Lincoln*, was offering inflation-indexed life annuities, both immediate and deferred. After seeing this thread I checked today and no companies are offering inflation-indexed annuities. :(

My state of residence is Maryland.

BobK

*Edit - It wasn't Lincoln, it was Principal. :oops:
Last edited by bobcat2 on Thu Feb 02, 2017 3:32 pm, edited 1 time in total.
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
bobcat2
Posts: 5221
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by bobcat2 » Thu Feb 02, 2017 2:58 pm

The Wizard wrote:It's easy enough to do modest additional annuitizations every so often to combat inflation.
How do you do it after age 85 when you need it most?

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

bigskyguy
Posts: 14
Joined: Sat Jan 24, 2015 4:59 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by bigskyguy » Thu Feb 02, 2017 3:02 pm

I just checked immediateannuities.com, and Principal does offer (thru them) a CPI adjusted immediate annuity.

Joe

The Wizard
Posts: 12151
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by The Wizard » Thu Feb 02, 2017 3:05 pm

Doing an SPIA with a fixed X% per year increase seems like a decent compromise. Otherwise one could be asking the insurance company to bear the risk of future inflation and they're not going to do that for free.

While it may seem that setting up a well designed income stream at start of retirement and never adjusting it again would be ideal, I'm not sure it is.
Some people use Variable Percentage Withdrawal (VPW), though that's not exactly what I'm doing.
I setup my initial retirement income to be a bit conservative to allow for bad years early on. But they turned out to be good years, so now I'm loosening the purse strings a bit to take more $$ out of tax-deferred in my pre-RMD years...
Attempted new signature...

PaulF
Posts: 120
Joined: Wed Aug 06, 2008 10:07 pm
Location: Wisconsin

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by PaulF » Thu Feb 02, 2017 3:06 pm

I just went through this exercise on Income Solutions (via the VG site) the other day, in order to try Bobcat2's funding ratio exercise (viewtopic.php?f=2&t=205824&start=150#p3203468)

The only firm quoting an inflation-adjusted annuity was The Principal. But, they quoted them! Various survivor benefits were also available for joint annuities. I also compared to a fixed percentage increase, and the pricing of a CPI was between the pricing of the 2%- and 3%-increasing ones, closer to 3% (and depending on survivor bennies).

(I'm in Wisconsin, in case that does turn out to matter.)

Edit: bigskyguy beat me to it!
Last edited by PaulF on Thu Feb 02, 2017 3:08 pm, edited 1 time in total.

User avatar
grayfox
Posts: 4932
Joined: Sat Sep 15, 2007 4:30 am

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grayfox » Thu Feb 02, 2017 3:07 pm

It seems to me that Insurers would price CPIU-Adjusted SPIA based on how much inflation they expect. The higher the expectation, the higher the price compared to a fixed annuity. E.g. 2% inflation expect, maybe +40% higher price, 3% inflation expected, maybe 50% higher price. Something like that,

But if they will not even offer a CPIU-Adjusted SPIA, that would indicate that there is too much uncertainty in inflation expectations to price it.

I saw this article: Investors Pile Into TIPS as Inflation Looms. I can't read it because you have to subscribe or sign in. But it sounds like inflation fears might be behind this.

I also noticed strange thing in the TIPS market. At this time, you can't buy online, but have to call. What's up with that?
Last edited by grayfox on Thu Feb 02, 2017 3:26 pm, edited 1 time in total.

User avatar
willthrill81
Posts: 5348
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by willthrill81 » Thu Feb 02, 2017 3:25 pm

The Wizard wrote:Doing an SPIA with a fixed X% per year increase seems like a decent compromise. Otherwise one could be asking the insurance company to bear the risk of future inflation and they're not going to do that for free.

While it may seem that setting up a well designed income stream at start of retirement and never adjusting it again would be ideal, I'm not sure it is.
Some people use Variable Percentage Withdrawal (VPW), though that's not exactly what I'm doing.
I setup my initial retirement income to be a bit conservative to allow for bad years early on. But they turned out to be good years, so now I'm loosening the purse strings a bit to take more $$ out of tax-deferred in my pre-RMD years...
I think it really depends on the individual retiree. Despite having a multi-million dollar portfolio in retirement, a significant number of retirees are almost petrified to spend any money from their portfolio for fear of running out, however low their withdrawal rate may be. For such people, a SPIA can be a good way to assure them of an income that they'll never outlive, even if it isn't inflation adjusted.

And I'm not really sure that the lack of COLA should completely turn someone away from a SPIA. Granted, the purchasing power of the income will go down over time, but most retirees spend less as time goes on anyway. And, assuming that a retiree still has a decent portfolio, that can cover the inflation decline of your SPIA income.

Wade Pfau's research has shown that some type of income flooring with a SPIA, combined with a 100% stock portfolio to cover discretionary expenses, may be optimal for many retirees.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
bobcat2
Posts: 5221
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by bobcat2 » Thu Feb 02, 2017 3:26 pm

bigskyguy wrote:I just checked immediateannuities.com, and Principal does offer (thru them) a CPI adjusted immediate annuity.
Joe
Seeing your post I also checked at immediateannuities.com, and Principal does offer (thru immediateannuities) CPI adjusted immediate annuities in Md. It's strange that Principal is also offering life annuities at Income Solutions, but not the CPI adjusted ones. :?

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

The Wizard
Posts: 12151
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by The Wizard » Thu Feb 02, 2017 3:40 pm

bobcat2 wrote:
The Wizard wrote:It's easy enough to do modest additional annuitizations every so often to combat inflation.
How do you do it after age 85 when you need it most?

BobK
Excellent question, since there are upper age limits to starting lifetime annuity payouts, depending on the state and the insurance company.
There are various workarounds, depending on the person's overall financial health.
Starting SS at 70 is a step in the right direction.
One last annuitization in your early 80s should cover you at least till 90.
Additional withdrawals from portfolio can help as well...
Attempted new signature...

User avatar
bobcat2
Posts: 5221
Joined: Tue Feb 20, 2007 3:27 pm
Location: just barely Outside the Beltway

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by bobcat2 » Thu Feb 02, 2017 3:53 pm

PaulF wrote:The only firm quoting an inflation-adjusted annuity was The Principal. But, they quoted them! Various survivor benefits were also available for joint annuities. I also compared to a fixed percentage increase, and the pricing of a CPI was between the pricing of the 2%- and 3%-increasing ones, closer to 3% (and depending on survivor bennies).
Yes, I also noticed that the 3% graded inflation adjusted annuities were similarly priced to the real annuities. My guess is that real life annuities are priced about 1% above LT expected inflation, say as measured by the spread between LT nominal Treasuries and LT TIPS. That seems like a reasonable rule of thumb to me. So if the spread is 2%, real life annuities are priced close to 3%, because the risk of being wrong is big on the high side from the issuers POV.

BobK
In finance risk is defined as uncertainty that is consequential (nontrivial). | The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.

User avatar
Ever Ready
Posts: 294
Joined: Sat Feb 24, 2007 3:21 pm
Location: DC metro

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by Ever Ready » Thu Feb 02, 2017 3:55 pm

Investors Pile Into TIPS as Inflation Looms -- 2nd Update


http://uk.advfn.com/news/DJN/2016/article/72778776

User avatar
nisiprius
Advisory Board
Posts: 36457
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by nisiprius » Thu Feb 02, 2017 4:44 pm

grayfox wrote:...Question: If CPIU-Adjusted SPIA is not available, is it worth spending 43% more for +3% Annual Increase?...
Probably. Some years ago I set up a spreadsheet with life tables and survival rates and became an amateur actuary, and the actual premiums charged by insurers jibed pretty well with my calculations, particularly relative amounts. I didn't see any evidence that, say, 3%-increasing annuities were obviously any better or worse in terms of a "money's worth" calculation. So the rational thing is to buy what best fits your actual needs, which to me would suggest some kind of increasing income stream because of inflation.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

stlrick
Posts: 400
Joined: Mon Apr 14, 2008 4:37 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by stlrick » Thu Feb 02, 2017 4:58 pm

You can do it yourself.

You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not.

User avatar
willthrill81
Posts: 5348
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by willthrill81 » Thu Feb 02, 2017 5:13 pm

stlrick wrote:You can do it yourself.

You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not.
+1

That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

RetiredinKaty
Posts: 112
Joined: Mon Sep 09, 2013 6:52 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by RetiredinKaty » Thu Feb 02, 2017 5:35 pm

I agree with stlrick and some others above. You can do it yourself. Buy nominal life annuities and then invest in TIPS to cover your expected life, or buy an annuity with a fixed COLA or no COLA now and allow for the purchase of a catch all annuity later on as needed.

I think Bogleheads tend to over-rate inflation indexed annuities. Annuities are simply contracts of money for money. An annuity without a COLA is the simplest way to buy your way into a life expectancy risk pool. There is no insurance advantage to buying inflation protection because all parties are hurt more or less equally by inflation.

A no COLA annuity is "big money up front." When you demand inflation protection, you are saying to the insurer "Wait, not so fast! I want smaller payments now and larger ones later on!" Every additional year of life is less probable than the one before, so I have always wondered whether the no COLA annuity might be a better bet.

I believe retirement researcher Wade Pfau found in 2012 that annuities helped reduce sequence of returns risk. Dr. Pfau was surprised to find that no COLA annuities were more effective at this than inflation adjusted ones. The finding was not surprising to me, because I think that when the market tanks early in retirement then "big money up front" is the better annuity.

PaulF
Posts: 120
Joined: Wed Aug 06, 2008 10:07 pm
Location: Wisconsin

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by PaulF » Thu Feb 02, 2017 6:03 pm

willthrill81 wrote:That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside.
Well, there is a potential behavioral pitfall. But that certainly seems like a winning strategy for a disciplined boglehead!

User avatar
grayfox
Posts: 4932
Joined: Sat Sep 15, 2007 4:30 am

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grayfox » Thu Feb 02, 2017 7:34 pm

grayfox wrote: How much should you pay for each one?

Code: Select all

Age  Fixed        +3% Adjustment
60	$12,000.00	$12,000.00
61	$12,000.00	$12,360.00
62	$12,000.00	$12,730.80
63	$12,000.00	$13,112.72
64	$12,000.00	$13,506.10
65	$12,000.00	$13,911.28
66	$12,000.00	$14,328.62
67	$12,000.00	$14,758.48
68	$12,000.00	$15,201.23
69	$12,000.00	$15,657.27
70	$12,000.00	$16,126.99
71	$12,000.00	$16,610.80
72	$12,000.00	$17,109.12
73	$12,000.00	$17,622.39
74	$12,000.00	$18,151.06
75	$12,000.00	$18,695.59
76	$12,000.00	$19,256.46
77	$12,000.00	$19,834.15
78	$12,000.00	$20,429.17
79	$12,000.00	$21,042.05
80	$12,000.00	$21,673.31
81	$12,000.00	$22,323.51
82	$12,000.00	$22,993.22
83	$12,000.00	$23,683.02
84	$12,000.00	$24,393.51
:?: Question: If CPIU-Adjusted SPIA is not available, is it worth spending 43% more for +3% Annual Increase?
Suppose you knew for a fact that the payment would last exactly 21 or 24 years. Here's quick calculations using LibreOffice NPR() function and a single discount rate = 2%.**

For Male, 21 annual payments: NPR = $211,896.58 vs. $287,292.38. (35.6% more for 3% Adjustment)
For Female, 24 annual payments: NPR = $234,281.48 vs. $331,466.51. (41.5% more for 3% Adjustment)

Considering that the annuity provides also longevity insurance, 40-45% extra for 3% Adjustment sounds like a fair deal to me.

:?: I wonder of you should take into account how long you *think* you will live? Not just actuarial figures which are for everyone, but how long you expect to last. E.g. if you are currently healthy and parents lived to 90s. The longer you collect, the better the deal you got.

-----------------------------------------
** Current Guaranteed Treasury Rates:
2YR 1.22
5YR 1.93
10YR 2.48
20YR 2.80
30YR 3.08

A more exact calculation could take into account the Term Structure of interest rates.

User avatar
FIREchief
Posts: 2625
Joined: Fri Aug 19, 2016 6:40 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by FIREchief » Thu Feb 02, 2017 8:36 pm

Inflation will probably be a non-issue for the rest of my life. Or, inflation may be a portfolio-killing, lifestyle-diminishing monster from which there is no escape. I really have no idea which it will be. Therefore, I buy TIPS for my LMP. Last time (and every time) that I've checked, nobody sells CPI-U adjusted SPIA's in my state. If others have access to them, then full speed ahead! (assuming the insurance company and/or your state "guarantee" are rock solid, sleep great at night institutions). :sharebeer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

AlohaJoe
Posts: 3676
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by AlohaJoe » Thu Feb 02, 2017 8:57 pm

Inflation adjusted SPIAs have been quietly dying for a while. There was a thread a year or two ago by someone who could only find 3 companies still selling them. 3 in a nation of 350 million. When everyone tells you to not put more than $250,000 in any one company.

grok87
Posts: 8295
Joined: Tue Feb 27, 2007 9:00 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grok87 » Thu Feb 02, 2017 10:23 pm

I find the lack of inflation adjusted annuities very disappointing.
Keep calm and Boglehead on. KCBO.

AlohaJoe
Posts: 3676
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by AlohaJoe » Thu Feb 02, 2017 11:29 pm

willthrill81 wrote:
stlrick wrote:You can do it yourself.

You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not.
+1

That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside.
The downside is that it doesn't work :twisted: . Just do the math to see that. According to Schwab's annuity quote a $10,000 nominal annuity gets you $624 a year: 6.24%. grayfox says that a 3% increase (not even true CPI-U) costs an extra +42%. So to get $624 you need to pay $14,200: 4.3%

So you spend $1,000,000 and buy a nominal annuity. You need $43,000 a year (the 4.3% from above) but are receiving $63,000 a year. So you have $20,000 a year to put into TIPS to cover inflation increases, at least to start with.

Image

You can see that by 1975 you're already dipping into your TIPS fund. By 1982 (just 13 years into retirement) the TIPS fund is totally depleted. After which you are receiving $63,000 from the annuity but have expenses of $111,000. Your quality of life will need to be reduced by over 40% for the next ~15 years of your retirement.

For the plan of purchasing TIPS with extra money from the annuity to work you'd need to be able to live off of just $27,000 (of the original $63,000). That rate, 2.7%, is far far lower than any inflation-adjusted annuity that was ever offered.

grok87
Posts: 8295
Joined: Tue Feb 27, 2007 9:00 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by grok87 » Thu Feb 02, 2017 11:34 pm

AlohaJoe wrote:
willthrill81 wrote:
stlrick wrote:You can do it yourself.

You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not.
+1

That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside.
The downside is that it doesn't work :twisted: . Just do the math to see that. According to Schwab's annuity quote a $10,000 nominal annuity gets you $624 a year: 6.24%. grayfox says that a 3% increase (not even true CPI-U) costs an extra +42%. So to get $624 you need to pay $14,200: 4.3%

So you spend $1,000,000 and buy a nominal annuity. You need $43,000 a year (the 4.3% from above) but are receiving $63,000 a year. So you have $20,000 a year to put into TIPS to cover inflation increases, at least to start with.

Image

You can see that by 1975 you're already dipping into your TIPS fund. By 1982 (just 13 years into retirement) the TIPS fund is totally depleted. After which you are receiving $63,000 from the annuity but have expenses of $111,000. Your quality of life will need to be reduced by over 40% for the next ~15 years of your retirement.

For the plan of purchasing TIPS with extra money from the annuity to work you'd need to be able to live off of just $27,000 (of the original $63,000). That rate, 2.7%, is far far lower than any inflation-adjusted annuity that was ever offered.
nice post.
Keep calm and Boglehead on. KCBO.

PaulF
Posts: 120
Joined: Wed Aug 06, 2008 10:07 pm
Location: Wisconsin

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by PaulF » Thu Feb 02, 2017 11:41 pm

AlohaJoe wrote: The downside is that it doesn't work :twisted:
I just want to be sure I understand your message. I believe you chose the worst possible starting date (on purpose), right? And your point is that we just don't know when inflation will take off, so this strategy (which might work in normal times) cannot provide the protection of a true CPI-adjusted annuity, right? Am I correct in my reading of your message?

Did you happen to check how if fares in "normal" times, when unexpected inflation doesn't show up?

User avatar
willthrill81
Posts: 5348
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by willthrill81 » Fri Feb 03, 2017 12:13 am

AlohaJoe wrote:
willthrill81 wrote:
stlrick wrote:You can do it yourself.

You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not.
+1

That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside.
The downside is that it doesn't work :twisted: . Just do the math to see that. According to Schwab's annuity quote a $10,000 nominal annuity gets you $624 a year: 6.24%. grayfox says that a 3% increase (not even true CPI-U) costs an extra +42%. So to get $624 you need to pay $14,200: 4.3%

So you spend $1,000,000 and buy a nominal annuity. You need $43,000 a year (the 4.3% from above) but are receiving $63,000 a year. So you have $20,000 a year to put into TIPS to cover inflation increases, at least to start with.

Image

You can see that by 1975 you're already dipping into your TIPS fund. By 1982 (just 13 years into retirement) the TIPS fund is totally depleted. After which you are receiving $63,000 from the annuity but have expenses of $111,000. Your quality of life will need to be reduced by over 40% for the next ~15 years of your retirement.

For the plan of purchasing TIPS with extra money from the annuity to work you'd need to be able to live off of just $27,000 (of the original $63,000). That rate, 2.7%, is far far lower than any inflation-adjusted annuity that was ever offered.
Getting a 0% real return really kills that plan. It sure sounded good though.

Let's compare the difference, just for fun, if you had invested that $1,000,000 in VWINX, Vanguard's Wellesley Income fund (60% bonds/40% large cap value), with those same withdrawals. I'm assuming that you start with $1M and take out your $43k at the beginning of the starting year, 1970, the inception year of VWINX.

Year Inflation Annuity Spending VWINX Return Ending VWINX Balance
1970 5.29% $63,000 $43,000 7.10% $1,024,947
1971 3.27% $63,000 $44,406 15.03% $1,127,916
1972 3.41% $63,000 $45,920 9.75% $1,187,490
1973 8.71% $63,000 $49,920 -3.49% $1,097,869
1974 12.34% $63,000 $56,080 -6.43% $974,802
1975 6.94% $63,000 $59,972 17.46% $1,074,559
1976 4.86% $63,000 $62,887 23.28% $1,247,190
1977 6.70% $63,000 $67,100 4.27% $1,230,480
1978 9.02% $63,000 $73,153 3.62% $1,199,222
1979 13.29% $63,000 $82,875 6.20% $1,185,561
1980 12.52% $63,000 $93,250 11.88% $1,222,077
1981 8.92% $63,000 $101,568 8.67% $1,217,657
1982 3.83% $63,000 $105,458 23.30% $1,371,341
1983 3.79% $63,000 $109,455 18.60% $1,496,596
1984 3.95% $63,000 $113,779 16.64% $1,612,918
1985 3.80% $63,000 $118,102 27.41% $1,904,544
1986 1.10% $63,000 $119,402 18.34% $2,112,538
1987 4.43% $63,000 $124,691 -1.92% $1,949,680
1988 4.42% $63,000 $130,202 13.61% $2,067,109
1989 4.65% $63,000 $136,257 20.93% $2,334,979
1990 6.11% $63,000 $144,582 3.76% $2,272,756

Granted, this is only one particular sequence of withdrawals and returns, but I think it's very telling. Even after 1973-1974, where you had two years of stiff inflation and negative returns, you still end the year almost where you started. And after 21 years, your portfolio's nominal balance has doubled, while enabling your nominal spending to more than triple. As of 1990, your spending represents 6.3% of your portfolio, but that's only after 21 years of withdrawals, and research consistently shows that retirees are quite likely to have reduced their real rate of spending significantly at this point in time.

It really makes me question the value of a SPIA without a COLA. Although, when you consider that the first decade or so of a 30 year retirement is the most crucial for determining the success rate of a 'reasonable' withdrawal rate from a traditional portfolio, a SPIA could help you to overcome a string of bad years early in that would do irreparable damage to your investment portfolio.
Last edited by willthrill81 on Fri Feb 03, 2017 12:19 am, edited 1 time in total.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
willthrill81
Posts: 5348
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by willthrill81 » Fri Feb 03, 2017 12:17 am

PaulF wrote:
AlohaJoe wrote: The downside is that it doesn't work :twisted:
I just want to be sure I understand your message. I believe you chose the worst possible starting date (on purpose), right? And your point is that we just don't know when inflation will take off, so this strategy (which might work in normal times) cannot provide the protection of a true CPI-adjusted annuity, right? Am I correct in my reading of your message?

Did you happen to check how if fares in "normal" times, when unexpected inflation doesn't show up?
If the actual inflation rate was exactly the same as you predicted, then it would absolutely work. The problem is that no one can predict what the inflation rate will be with any confidence. And TIPS just produce a 0% real rate of return, so they don't help you 'get ahead' of any higher than expected inflation.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

PaulF
Posts: 120
Joined: Wed Aug 06, 2008 10:07 pm
Location: Wisconsin

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by PaulF » Fri Feb 03, 2017 12:35 am

I think that was a "yes." :confused

AlohaJoe
Posts: 3676
Joined: Mon Nov 26, 2007 2:00 pm
Location: Saigon, Vietnam

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by AlohaJoe » Fri Feb 03, 2017 1:07 am

PaulF wrote:
AlohaJoe wrote: The downside is that it doesn't work :twisted:
I just want to be sure I understand your message. I believe you chose the worst possible starting date (on purpose), right? And your point is that we just don't know when inflation will take off, so this strategy (which might work in normal times) cannot provide the protection of a true CPI-adjusted annuity, right? Am I correct in my reading of your message?
Yes, you are reading my message correctly.
Did you happen to check how if fares in "normal" times, when unexpected inflation doesn't show up?
The only reason anyone would ever buy an inflation-adjusted SPIA is because they want to protect against the 1970s.

During normal times, you probably don't even need to bother with the "save the extra in TIPS for when inflation shows up" part of the strategy.

To overstate things somewhat: The strategy doesn't work when you need it and doesn't matter when you don't.

FWIW, I had the same idea (of saving the extra monies from a nominal annuity) once and was disappointed when I ran the numbers to find that my great idea didn't work out in real life :(

Now, that said, if you're willing to live with less than 100% protection against inflation, the strategy isn't terrible. It will help in some cases. But it doesn't offer the same protection as a true CPI-adjusted annuity (like Social Security is).

But you're probably better off putting the "extra money" into another nominal annuity rather than TIPS or equities, though I haven't run the numbers to see how that works out.

User avatar
FIREchief
Posts: 2625
Joined: Fri Aug 19, 2016 6:40 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by FIREchief » Fri Feb 03, 2017 1:56 am

Funny how people assume that 70's type inflation is the worst case scenario. We have absolutely no idea how bad inflation could be in the future. I hope everybody keeps on thinking the way they are thinking so that I can still get no worse than zero real return on TIPS.... :sharebeer
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

rgs92
Posts: 2139
Joined: Mon Mar 02, 2009 8:00 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by rgs92 » Fri Feb 03, 2017 2:29 am

Inflation index annuities are always hideously overpriced, and highly so in a relatively low interest rate environment like we still have.
I would never buy one. If anything, get one that goes up a fixed percentage each year. Fidelity sells these. But plain vanilla fixed is better, and use stocks for inflation protection.

User avatar
willthrill81
Posts: 5348
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by willthrill81 » Fri Feb 03, 2017 11:08 am

FIREchief wrote:Funny how people assume that 70's type inflation is the worst case scenario. We have absolutely no idea how bad inflation could be in the future. I hope everybody keeps on thinking the way they are thinking so that I can still get no worse than zero real return on TIPS.... :sharebeer
That's why I personally like to have 3-5% of my net worth in physical precious metals in my possession. I consider them nothing more than insurance against hyperinflation that, over the long-term, will neither gain nor lose real value (roughly equivalent to TIPS in the long-term).
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
HomerJ
Posts: 11564
Joined: Fri Jun 06, 2008 12:50 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by HomerJ » Fri Feb 03, 2017 11:26 am

itstoomuch wrote:Why would you want an inflation adjusted SPIA ?
Wouldn't a variable annuity that beats inflation be better :idea: ?
Variable annuities are a terrible idea. So no, it wouldn't be better.

User avatar
willthrill81
Posts: 5348
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by willthrill81 » Fri Feb 03, 2017 11:27 am

HomerJ wrote:
itstoomuch wrote:Why would you want an inflation adjusted SPIA ?
Wouldn't a variable annuity that beats inflation be better :idea: ?
Variable annuities are a terrible idea. So no, it wouldn't be better.
+1

Variable annuities are, for the most part, one of the worst investments you can possibly make. Why? In a word, fees.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

User avatar
HomerJ
Posts: 11564
Joined: Fri Jun 06, 2008 12:50 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by HomerJ » Fri Feb 03, 2017 11:28 am

bobcat2 wrote:
The Wizard wrote:It's easy enough to do modest additional annuitizations every so often to combat inflation.
How do you do it after age 85 when you need it most?

BobK
Why do you need it most after 85? One, you're probably already dead. Two, if you're not dead, you will be soon, and inflation won't have much time to hurt you.

stlrick
Posts: 400
Joined: Mon Apr 14, 2008 4:37 pm

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by stlrick » Fri Feb 03, 2017 12:28 pm

AlohaJoe wrote:
willthrill81 wrote:
stlrick wrote:You can do it yourself.

You have decided to invest X dollars to get an inflation adjusted annuity paying out Y dollars today. Use the X dollars to buy an SPIA that is not inflation-adjusted. Your payout will be larger: Y + Z. Live on Y (you've already decided that it is enough now), and invest the Z. TIPS if you are conservative, stocks if you are not.
+1

That's an ingenious strategy that I haven't heard of before. Plus, it gives you better cash flow and flexibility today. I can't think of a downside.
The downside is that it doesn't work :twisted: . Just do the math to see that. According to Schwab's annuity quote a $10,000 nominal annuity gets you $624 a year: 6.24%. grayfox says that a 3% increase (not even true CPI-U) costs an extra +42%. So to get $624 you need to pay $14,200: 4.3%

So you spend $1,000,000 and buy a nominal annuity. You need $43,000 a year (the 4.3% from above) but are receiving $63,000 a year. So you have $20,000 a year to put into TIPS to cover inflation increases, at least to start with.

Image

You can see that by 1975 you're already dipping into your TIPS fund. By 1982 (just 13 years into retirement) the TIPS fund is totally depleted. After which you are receiving $63,000 from the annuity but have expenses of $111,000. Your quality of life will need to be reduced by over 40% for the next ~15 years of your retirement.

For the plan of purchasing TIPS with extra money from the annuity to work you'd need to be able to live off of just $27,000 (of the original $63,000). That rate, 2.7%, is far far lower than any inflation-adjusted annuity that was ever offered.
Thanks for doing this. I have two questions.

1. It appears to me that you are comparing the cumulative TIPS strategy with the cost of an inflation-adjusted annuity that provides a guaranteed 3% increase each year. The years you selected would result in this inflation-adjusted annuity failing also, because inflation exceeds 3% every year. Does it fail less than the TIPS strategy?
2. What if when the TIPS balance had grown, somewhere in the 7th to 10th year of this plan, a new SPIA was purchased with the balance in the TIPS account? The new SPIA would also have the benefit of being purchased at an older age.

User avatar
nisiprius
Advisory Board
Posts: 36457
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by nisiprius » Fri Feb 03, 2017 12:36 pm

Look, it's always the same-old same-old. There are strategies based on various asset classes that "keep up with inflation," or seem to have kept up with inflation except when they didn't but that was very unusual, or have a good story that explains why they ought to keep up on inflation.

And you can choose to assemble your own portfolio of things that seem to, usually have, are supposed to keep up with inflation.

Or you can pay someone else to take the risk and give you something that they guarantee will match the CPI every year.

And, guess what? If you're willing to take the risk yourself you can have a pretty good shot at doing better, but if the point was to reduce the risk, then the preference should be for the guaranteed thing.

What I don't know is whether the insurance companies that offered inflation-indexed annuities did it the sure-thing way by investing in TIPS, or whether they preferred to take the risk themselves rather than let the Treasury take it for them... and are having second thoughts.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

itstoomuch
Posts: 5343
Joined: Mon Dec 15, 2014 12:17 pm
Location: midValley OR

Re: No Inflation-Adjusted SPIAs at Vanguard

Post by itstoomuch » Fri Feb 03, 2017 1:18 pm

^ you hit the nail, Nisiprius.

Current inflation is relatively low and investment returns fairly high. Make investment money while you can in deflationary periods; Then invest in laddered products during the inflation upswing. This is what we are trying to do.
JMO :? .
YMMV
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

Post Reply