First, see a professional planner before considering an annuity. There are all kinds: Fixed, Variable, Immediate, Deferred, etc. They may be useful for a retiree but for anyone with 10 or more years to retirement an annuity may not make any sense at all. NAPFA advisors do not sell them so we can be objective in their usefulness for your specific situation.
Based on an online calculator (from Vanguard), a 65-year-old male who invests $100,000 in a traditional annuity gets $781 as his first month's payment, versus $590 from the inflation-adjusted one. Use for comparison purposes when shopping for an immediate, fixed annuity.
Remember $781/month is $9,372 per year (basically 9% of the lump-sum provided to buy the annuity but the payout includes a return of principal so it is not a 9% return on your money by any means).
This is also a SINGLE-LIFE annuity payout and would be substantially less for a Joint&Survivor option, at an earlier age than 65 (since the life-expectancy would be longer) or if you are a female versus a male participant for the same reason.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.