2 thoughts on “How to Create Your Own Pension: A Path to Certainty and Security”
Whoa! 10 ads for Clover Health. I’m sold. JK!
Good blog and podcast IPB Bro’s. Love SPIAs! The other side of life insurance – living too long. Personal Pension options are directly related to whole life insurance. It’s a strategy we were taught at Guardian… Ideally, for every dollar owned of whole life insurance coverage, that’s a dollar that can be annuitized, and eventually replaced by the death benefit proceeds. Also, annuitization often guarantees a higher payout than the 4% withdrawal rule of thumb. As we know, a major drawback with a maximum life SPIA payment is giving up principal and losing it at death. The insurance effectively solves the return of principal problem. Good show!
BTW – Why is annuitization always considered misspelled? Wall street removed it from Webster’s … 401konspiracy!
Perhaps you may want to calculate the amount needed at retirement to produce an income for life for you and your spouse (unless you are not married)…a joint SPIA, which produces less income in your scenario. Also the SPIA rates that are used today are much lower than historical averages….which range between 6.28% to 13.28% from January1986 through January2020 for a 65 year old. I for one do not think these current rates will remain at their current lows, but may start going back to their historic norms over the next decade or two…which of course decreases the amount of monthly savings to produce the income you indicated. Having said that, using todays rates makes sense, and if the SPIA rates do increase so much for the better. Thanks for the information
Whoa! 10 ads for Clover Health. I’m sold. JK!
Good blog and podcast IPB Bro’s. Love SPIAs! The other side of life insurance – living too long. Personal Pension options are directly related to whole life insurance. It’s a strategy we were taught at Guardian… Ideally, for every dollar owned of whole life insurance coverage, that’s a dollar that can be annuitized, and eventually replaced by the death benefit proceeds. Also, annuitization often guarantees a higher payout than the 4% withdrawal rule of thumb. As we know, a major drawback with a maximum life SPIA payment is giving up principal and losing it at death. The insurance effectively solves the return of principal problem. Good show!
BTW – Why is annuitization always considered misspelled? Wall street removed it from Webster’s … 401konspiracy!
Perhaps you may want to calculate the amount needed at retirement to produce an income for life for you and your spouse (unless you are not married)…a joint SPIA, which produces less income in your scenario. Also the SPIA rates that are used today are much lower than historical averages….which range between 6.28% to 13.28% from January1986 through January2020 for a 65 year old. I for one do not think these current rates will remain at their current lows, but may start going back to their historic norms over the next decade or two…which of course decreases the amount of monthly savings to produce the income you indicated. Having said that, using todays rates makes sense, and if the SPIA rates do increase so much for the better. Thanks for the information