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URL:  http://boards.fool.com/1-slightly-off-topic-but-it-is-possible-to-29804037.aspx

Subject:  Re: How to make your own annuity on the cheap Date:  1/25/2012  5:54 PM
Author:  hockeypop Number:  70038 of 85666

1. Slightly off topic, but it is possible to better immediate annuity results by buying a ladder of treasury STRIPS (out 32 years by my calculation to equal the result gotten on Vanguard) and if you augment every other year with corporate zero coupons it extends it lots further. There are workarounds to the survivor aspects through life insurance. With Vanguard free trades you can do that in two years at no cost. I think I first read about that from Intercst, but have done my own calculations.

Personally, when both of us are retired, I intend to start it for five years in a low interest environment, and then extend it as inflation (and interest rates) increase.

2. The original example IMO shows the problem that insurers face -- Variable options suck in a sideways or down market.

3. There are some advantages to some of the "stable value" options for "goosing" guaranteed returns, but any time you add insurance wraps the cost goes up. Using real estate, which is how I think TIAA does it, is currently working in this environment.

Interesting discussion.

Hockeypop ... back to lurking
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