I expect across time, as people live longer, insurance company actuaries will adjust their life expectancies upward which will impact current levels of mortality credits.
While academically, I like the idea of QLACs, I don’t like committing IRA assets in my 60s for my 80s. I believe SPIAs can play an important role beyond other sources of secured income. Whether or not buying a 2, 3 or 4% inflation rider needs to be assessed carefully. Sometimes, laddering a series flat SPIAs across time as you need additional income is the right way to address your personal inflation other times an indexed product might make more sense.
A QLAC/DIA will always payout more, but they are holding your money across time. I then can do a PV calculation using a conservative 4-5% discount rate over 15-20 years and ensure that we reserve adequate portfolio funds for longevity should we live in our 80s and beyond. I prefer to look at current SPIA rates for a couple in their 80s and see what secured income costs and what payout rates are. Too much can happen across this length of time, and I prefer buying secured income closer to when we might need it.
While academically, I like the idea of QLACs, I don’t like committing IRA assets in my 60s for my 80s. I believe SPIAs can play an important role beyond other sources of secured income. Whether or not buying a 2, 3 or 4% inflation rider needs to be assessed carefully. Sometimes, laddering a series flat SPIAs across time as you need additional income is the right way to address your personal inflation other times an indexed product might make more sense.
A QLAC/DIA will always payout more, but they are holding your money across time. I then can do a PV calculation using a conservative 4-5% discount rate over 15-20 years and ensure that we reserve adequate portfolio funds for longevity should we live in our 80s and beyond. I prefer to look at current SPIA rates for a couple in their 80s and see what secured income costs and what payout rates are. Too much can happen across this length of time, and I prefer buying secured income closer to when we might need it.
Statistics: Posted by iim7V7IM7 — Sun Mar 24, 2024 10:53 am — Replies 17 — Views 1523