{"id":43692,"date":"2022-06-24T10:11:53","date_gmt":"2022-06-24T15:11:53","guid":{"rendered":"https:\/\/prefblog.com\/?p=43692"},"modified":"2022-06-24T10:11:53","modified_gmt":"2022-06-24T15:11:53","slug":"research-annuities-part-2","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=43692","title":{"rendered":"Research : Annuities, Part 2"},"content":{"rendered":"

This essay extends the prior discussion of annuities presented in Annuities Part 1<\/a> and The Annuity Decision<\/a>.<\/p>\n

A retirement calculator is provided<\/a> and discussed, with notes on its design, shortcomings and potential for future enhancements.<\/p>\n

I conclude in part:<\/p>\n

My advice is to remain as flexible as possible. Retirement plans should be updated annually, while eschewing the temptation to over-manage one\u2019s assets. Investors should focus on a 15-year plan (at the most) rather than a 30-year plan, while keeping a sharp eye not on the prospects for ruin, but for the prospects of large cuts in final results.<\/p>\n

If, for instance, the first 15 years of retirement investment go badly, there is no need to continue with the same allocation for the next 15; and this should be recognized at year zero. In year 15 an annuity will be a lot cheaper than it is at year zero, and risk should be assessed with this in mind. In many cases, I suggest, an annuity purchase should be deferred, using the potential for annuity purchase as a safety net for one\u2019s retirement planning. After all, they grow a bit cheaper every day of your life! They also represent an irreversible decision \u2013 so plan to drop off your cheque on your way home from the doctor\u2019s office, not on the way there!<\/p>\n

Cash is important. If at all possible, withdrawals from the portfolio should be funded by portfolio income; if there is a shortfall, consider shifting to higher yielding assets (without assuming too much risk, of course! It should be recognized that a higher cash yield will result in a lower expected capital gain). If that still does not solve the problem, an annuity should be considered.<\/p>\n

And, by all means, don\u2019t take this or any other financial projection too seriously. They are useful as background, to allow you to play with the effects of different decisions, but they all rely on highly uncertain predictions of future events. Remember: I didn\u2019t predict a wave of revolts across the Middle East this year \u2013 and neither did anybody else.<\/p><\/blockquote>\n

Look for the research link!<\/p>\n

<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

This essay extends the prior discussion of annuities presented in Annuities Part 1 and The Annuity Decision. A retirement calculator is provided and discussed, with notes on its design, shortcomings and potential for future enhancements. …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-43692","post","type-post","status-publish","format-standard","hentry","category-publications"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/43692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43692"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/43692\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}