“$1.3 million for 25 years equals $52,000 a year.” But if you only spend $52,000 a year, the money that’s left earns interest. With the 5% return assumption, y

“$1.3 million for 25 years equals $52,000 a year.” But if you only spend $52,000 a year, the money that’s left earns interest. With the 5% return assumption, you could spend a little over $92,000 a year for 25 years. Accordning to the simple calculator at www.brkdirect.com, if you pay Berkshire Hathaway $1.3 million, they will guarantee a payment of $80,293 every year for as long as you live, assuming you are male, currently 65 years old, and living in Nebraska. If the annuity is bought with post-tax dollars, the after-tax amount will be $73,918 a year for 20 years and then $48,176 a year. Annuities are generally regarded as a bad deal for a variety of reasons, but this doesn’t sound bad to me at all.