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Using CDs and similar at 5% a year, they could draw about $24k a year for 20 years, then they're out of money. To make it last 30 years, the draw goes down th less than $20k a year. And that's with no increases for inflation. I don't think they can afford the risks of investing in the market. If they lose their principal, they're toast.

Hi Peter,
I am pretty far from retirement (34 y.o)
but these numbers maid me think about fixed annuity,
I don't know much about them, and have heard a lot of bad things especially about variable annuities and fees and bad advisers etc.
But I checked Vanguard and their "Vanguard Lifetime Income Program" - look like it might be little bit better, because the scenario you described ($20K/year, no increase for inflation) will leave no money after 30 years, and $20 in today dollars will be about $10 in 30 years given 2.5% inflation,
Vanguard program gives $21,916.32/year for life of both spouses, if they surrender $300,000 now
or $15,295.32/year inflation adjusted , which is about the same,
but at least GUARANTEED for longer life and GURANTEED against higher inflation,
if this something worth checking or I am missing something?

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