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But there is nothing left after the person dies, right? This means that the 12% "return" actually includes a return of principal.

How is this different from drawing down the principal in a portfolio?

There's no risk of out living the portfolio. Duh. :)

I think the "Duh" comment wasn't called for, even with the smiley face.

Obviously there is no risk of out living the portfolio. I was referring to the conceptual difference regarding living off your principal.
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