Of course, Rayvt and sykesix would NEVER get a SPIA because (a) they're fortune tellers who know the future; (b) they have nerves of steel when the market crashes 50% and (c) they're religious about their investment/retirement strategy.Add to that d) I'm risk averse. The reasons why annuities are risky are virtually identical to why paying off your mortgage early is risky. Should you need your money at any point between now and the end of your life it will be difficult, if not impossible to access. And while you don't know what your rate of return will be with an annuity until you die, just as with a mortgage you are almost certainly better off in other investments. Intercst has a detailed and fascinating discussion on how to actually calculate the cost of SPIAs. Well worth bookmarking and reading again. http://www.retireearlyhomepage.com/annuity_costs.html
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