Aug 16, 2023
In this episode, The Annuity Man discussed:
Annuities that increase with inflation
The role of interest rates on pricing
For products that adjust for inflation
Reverse-engineering your income floor
Annuities don’t give things away for free. A product that magically increases with inflation doesn’t exist.
Lifetime income is primarily priced based on your life expectancy at the time you take the payment. Interest rates play a minor role.
For products that have a potential or contractual increase for inflation, the annuity company will severely lower the initial income as compared to the exact annuity without the increase.
Don’t focus on things that you can’t control. Focus on building up an income floor that suits your needs. Compute for the number you’ll need to cover your expenses; we can reverse-engineer a product for that.
"It's math to the annuity companies. It should be math to you. If it sounds too good to be true, it is every single time. " — Stan The Annuity Man.
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