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Old 04-22-2016, 10:50 AM
 
Location: Gilbert, AZ
3,180 posts, read 1,957,944 times
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Here's one piece of advice that I think applies to nearly everyone...

Don't even consider buying an SPIA until you've got a plan to delay taking SS until age 70. Using assets to cover expenses while waiting for SS is better than buying an annuity.
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Old 04-22-2016, 11:26 AM
 
Location: Mount Airy, Maryland
10,460 posts, read 5,924,770 times
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Quote:
Originally Posted by hikernut View Post
I'm a little stumped on this part. If you want a slush fund to use for big-ticket items just put the $100K into something fairly safe.

Something fairly safe will not return 5.65% for life. I know this may sound strange for someone suggesting I forfeit 100 grand but the original plan was never to spend down the principal, that would only lower my return on my 4% withdraw as I drown down the original amount. I'm just looking for a guaranteed check of just under $500/month for life.
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Old 04-22-2016, 11:28 AM
 
Location: Mount Airy, Maryland
10,460 posts, read 5,924,770 times
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Quote:
Originally Posted by hikernut View Post
Here's one piece of advice that I think applies to nearly everyone...

Don't even consider buying an SPIA until you've got a plan to delay taking SS until age 70. Using assets to cover expenses while waiting for SS is better than buying an annuity.
I'm just not comfortable drawing down our investments so I can wait until 70 to file. The difference between my SS check at 65 and at 70 is about $800/month. My way I will be receiving close to $500 and it will be showing up 5 years earlier. It will take me many years post 70 to recoupe the difference and in the meantime I've spent down principal.
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Old 04-22-2016, 12:36 PM
 
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there is no better annuity anywhere for the money then delaying ss . you can't compare to anything commercially available for whart delaying ss would cost .
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Old 04-22-2016, 12:38 PM
 
71,524 posts, read 71,712,424 times
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Quote:
Originally Posted by DaveinMtAiry View Post
Something fairly safe will not return 5.65% for life. I know this may sound strange for someone suggesting I forfeit 100 grand but the original plan was never to spend down the principal, that would only lower my return on my 4% withdraw as I drown down the original amount. I'm just looking for a guaranteed check of just under $500/month for life.
an annuity is not yielding 5.65% it is giving you a cash flow of your own principal at that rate . 13 years later when you get all your own money back is when you see your first return and you are on their time and it is quite low . 5.65% divided by 14 years is less then .50% first year on their dime
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Old 04-22-2016, 12:43 PM
 
Location: Idaho
4,624 posts, read 4,462,694 times
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Quote:
Originally Posted by DaveinMtAiry View Post
I'm just not comfortable drawing down our investments so I can wait until 70 to file. The difference between my SS check at 65 and at 70 is about $800/month. My way I will be receiving close to $500 and it will be showing up 5 years earlier. It will take me many years post 70 to recoupe the difference and in the meantime I've spent down principal.
I agree with you. The fee-only financial adviser that I talked to last December also suggested that I spend down my funds so that I could delay SS until I'm 70. In my case, the difference between what I get six-months after I retire, (which is when I plan to start drawing SS, at age 66), and what I would get at age 70 is also about $800 a month. That's a nice chunk of change, but I really don't want to spend down my nest egg. I'd rather have the security of knowing I have that emergency fund available if and when I need it.
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Old 04-22-2016, 12:49 PM
 
1,227 posts, read 1,259,322 times
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DaveinMtAiry,

Try this site: https://annuities.direct/ You can get a real live quote (not an average of quotes like on immediateannuities.com) for either joint or single. And you can play around between SPIA and DIA. No one will contact you and you don't have to give any private information. If you do decide to give an email address, you will be able to see quotes from 99% of the insurance companies in addition to their Comdex rankings. You can also order free information books, and you can watch videos on the subject.

I like this site better than playing around with Vanguard's site because Vanguard only represents 7 insurance companies.
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Old 04-22-2016, 12:56 PM
 
Location: Gilbert, AZ
3,180 posts, read 1,957,944 times
Reputation: 3320
Quote:
Originally Posted by DaveinMtAiry View Post
I'm just not comfortable drawing down our investments so I can wait until 70 to file.
Then don't wait until 70. But don't buy the SPIA. Instead use that money to delay taking SS as long as the money will allow. For instance, if your SS was going to be $25K/year, you can use that $100K to delay for 4 years. The $100K is gone either way, whether you buy the annuity or spend it.

If there are any no-brainers in retirement planning, this is one of them. I hesitate to say it will apply to 100% of the population because there is always some special case that pops up, but this should be the default decision for nearly everyone.
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Old 04-22-2016, 12:59 PM
 
71,524 posts, read 71,712,424 times
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here is kitces's views on delaying ss vs an annuity



https://www.kitces.com/blog/how-dela...money-can-buy/
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Old 04-22-2016, 01:00 PM
 
Location: Mount Airy, Maryland
10,460 posts, read 5,924,770 times
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Quote:
Originally Posted by mathjak107 View Post
an annuity is not yielding 5.65% it is giving you a cash flow of your own principal at that rate . 13 years later when you get all your own money back is when you see your first return and you are on their time and it is quite low . 5.65% divided by 14 years is less then .50% first year on their dime


Oddly enough you were the person who first put this annuity idea into my head, maybe a year ago with a post. Now you are trying to talk me out of it. LOL


I'm not sure I understand the point here, pardon my ignorance. I mean I get what you are saying, it is giving me 5.65% on my money which is now their money. I guess I just don't understand the math in the last part of your post. Can you elaborate on that so a dummy like me can understand?


Maybe I should spell out my plan. At 65 my SS check will be around $2,000, my FRA is 66/10 and that check is something like $2,200. Depending on where we are in life the initial plan is to put the house on the market when I turn 65 (wife will be 67) then and see what happens. It could sit for a year, in which case I would continue to work. But if it sells in a month I want a plan in place. And that plan would be to file for SS, use this house money ($400,000 or so), move south, then purchase a home in the $150,00 range. I am budgeting $50,000 for moving expenses, 6 months rental, and upgrades. This will leave approximately $200,000 from the house.


So I'm not crazy about the idea of spending down my investments as they are limited in order to reach 70 and then file. Hell I may not even reach 70! I want to have income to live while we are young enough and still have some security which is where the annuity comes into play. But not if it's not the smart thing to do.
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