gilgamesh wrote: ↑
Thu May 10, 2018 7:51 pm
Question,...when you annutize at a young age like 63, shouldn’t one consider inflation risks? In 15-20 years annuity payments may not be sufficient. Are you planning to use your portfolio for the extra funds or an SPIA ladder purchased later, or something else?
It turns out that only part of my immediate annuities with TIAA are the "fixed" type comparable to an SPIA, meaning TIAA Traditional.
The majority of my annuity income is variable and based on either commercial real estate or the broad stock market, both of which are "likely" to provide some inflation protection over the long run.
Right now, I'm looking at a significant increase in safe income when age 70 SS starts in 22 months, so inflation will be a non issue for the next few years.
Beyond that, I have the option of annuitizing an additional increment from my portfolio or simply spending part of my RMDs rather than reinvesting them, as I presently plan to.
A more general reply, for people who don't have access to TIAA and/or are averse to "good" variable annuities, is that one can "ladder" SPIAs.
Start with $2M, say.
Annuitize $500k at age 65.
Annuitize an additional $100k every five years, so long as your health is reasonably good.
Something like this should work, adjusted to your particular cash flow needs...
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