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Annuities 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 annu
by ThrustVectoring 10y ago
Annuities 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.