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$1M buys a lot of (mostly) safe dividend paying stocks, bonds, and real estate. $5k/month worth, net? Perhaps not, but certainly one could position himself bett
by sidlls 10y ago
$1M buys a lot of (mostly) safe dividend paying stocks, bonds, and real estate. $5k/month worth, net? Perhaps not, but certainly one could position himself better than $5k/mo on an annuity with a fairly small effort or higher risk tolerance.
- ThrustVectoring 10y agoAnnuities have an advantage because it effectively transfers wealth from people who die early to people who live longer. If you're only around to enjoy the annuity for a decade, you overpaid for the income stream. If you're around for five, you've underpaid. It's a vaguely similar advantage to taking out a reverse mortgage.
- sidlls 10y agoYes, I understand that, but my point is that there are better investments than an annuity, so the "$1M or $5k/mo" comparison falls a little flat. The aren't really the same.
- ThrustVectoring 10y agoOf course there are - that's why people offer annuities. Other investment options don't let you consume other people's inheritances when you live longer than them, though.