Dear Mr. Tan,
I am 48 yr of age. I am comtemplating to buy an annuity now, the payout to start from, maybe 55 or 60 yrs onwards. I found the payout be be exceedingly low. For a $100K annuity, the guarantee payout is about $400 per month plus an non-guaranteed amount for the rest of the life. A little calculation shows the breakeven for the investment is about 25 to 30yrs, hardly seemed worthwhile, not factoring inflation yet. May I have your advise on the investment?
REPLY
I suggest that you invest in a low cost investment fund for the next 10 to 20 years and find a right time, when the market is high, to convert into a life annuity when you are older, say from age 60 to 70 years.
Read this FAQ:http://www.tankinlian.com/faq/savings.html
I do support Mr Tan's opinion. At this moment Annuity payout is exceeding low, and too from the looks of it, low-medium risk investments actually payout better.
ReplyDeleteHowever if you know of someone who is older (at this point in time) and can't risk investing, Annuities is something to consider.