No. of Recommendations: 3
Using this calculator; If you plug in those numbers and use a 5% annual growth rate it equates to 17.73 year annuity.

What I actually meant was - taking the $447,943 and rolling it into the IRA - what annuity payout could you buy for yourself, if you were to buy an annuity within your IRA?

It is likely that you will get less than the $3166.08 that you are being promised by your pension, but you need to check.

I agree with what you are saying Bill. It just seems to me that it is awful hard to generate a decent income stream without going uncomfortably far out (for me anyway) on the risk spectrum.

What's 'decent'? Are you looking for the $3166/month? Or would something less be okay? And how much in principal are you willing to take out each month? Because that's effectively what you're doing when you take the annuity, is getting back some of your principal, plus some interest each month.

So if you rolled the lump sum in a separate IRA and set the IRA up to disburse $3166.08 to you each month, at a 3% annual return, your IRA would run out in 175 months, or 14.6 years. If you got a 5% annual return on your portfolio, it will run out in 214 months, or 17.8 years - essentially you've replicated annuity you already calculated. However, if you get a 6% annual return on your portfolio, it will last for 246 months, or 20.5 years, which is 2.7 years longer than the annuity would have lasted.

That said, if you don't need all $3166 every month, you could make the portfolio last even longer.

The bottom line for me is that it seems to me that if either one of us lives another 20 years or so, if we take the annuity, we (or at least one of us) will have more money at that time than if we didn't.

Not necessarily.

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