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JAFO31 asks,

A question for your libc: what would one need to pay, today, to buy an annuity that you described (25 year guarantee), to receive 40k in year one, with the payout adjusted for inflation each year, assuming current age 65 and reasonable health?

Why would there be a requirement for "reasonable health"? Since the insurance company captures the terminal value of the portfolio under an annuity contract, you'd think they'd be anxious to sell one of these puppies to an applicant on death's door. <grin>

I'd also be interested in the price of a true inflation-adjusted annuity. When I wrote the Soapbox article on safe withdrawal rates last year, I found several insurers that were willing to sell inflation-adjusted annuities with a fixed COLA (anywhere from 1% to 6% per year, no matter what the actual rate of inflation) but I found no annuity product that indexed the annual payment directly to the CPI. Has that situation changed?


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