[quote=ltsdd]If you’re that risk adverse and if you had $2.4M at the time you’re retired and want a guaranteed fixed amount of income for the next 30 years then it’s easier to buy an annuity. The problem is that these things are not adjusted for inflation, but I don’t think you’re concerned with that. I personally wouldn’t do it, but it may be a perfect vehicle for you. You can go here and play with the numbers:
Assuming a 1% annual growth rate and a withdrawal of $100K a year, your money will last about 27 years. If you bump the growth rate to 2% then you can expect to get a stream of income for 32 years. Now take that to 4% and you’ll probably croak before the money runs out (in about 65 years).[/quote]
I’m confused, why buy an annuity when you can ladder CD? I used that calculator, assuming $5M nest egg growing at 2% and a withdrawal rate of $100k/year. You should be good indefinitely. But with the annuity, you’ll be depleted after 198 years. Why not ladder CD, get 2% return, live off that 2% indefinitely?
