We both are fortunate to have Social Security benefits and I am fortunate to have a nominal company pension benefit. Together, these will cover our essential expenses for about the first decade of our retirement. But we anticipate that expense inflation will outstrip our income in our mid-70s.
We have set money aside in my IRA to purchased SPIAs starting in our mid-70s, at 80 and in our mid-80s should we be alive to address inflation. The payout rates on SPIAs at these ages are benefited by mortality credits and should keep us ahead of inflation into our 90s should we live that long. The current payout rates at 75, 80 and 85 are 8.2%, 9.1% and 10.6%/year respectively.
We priced joint SPiAs for joint survivor annuitants and used a conservative discount rate ton determine the PV of the assets required to purchase these in the future. Buying from A++ insurers from multiple companies and staying within State insurance limits mitigates default risk.
Having essential expenses covered by secured income sources (e.g., Social,Security, Pension and SPIAs) frees us up to spend on discretionary lifestyle expenses with our portfolio when we are younger without concern of sequence or returns, flexible spending schemes and SWR worries.
We have set money aside in my IRA to purchased SPIAs starting in our mid-70s, at 80 and in our mid-80s should we be alive to address inflation. The payout rates on SPIAs at these ages are benefited by mortality credits and should keep us ahead of inflation into our 90s should we live that long. The current payout rates at 75, 80 and 85 are 8.2%, 9.1% and 10.6%/year respectively.
We priced joint SPiAs for joint survivor annuitants and used a conservative discount rate ton determine the PV of the assets required to purchase these in the future. Buying from A++ insurers from multiple companies and staying within State insurance limits mitigates default risk.
Having essential expenses covered by secured income sources (e.g., Social,Security, Pension and SPIAs) frees us up to spend on discretionary lifestyle expenses with our portfolio when we are younger without concern of sequence or returns, flexible spending schemes and SWR worries.
Statistics: Posted by iim7V7IM7 — Fri May 03, 2024 8:51 pm — Replies 85 — Views 8119