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<blockquote data-quote="456" data-source="post: 954579" data-attributes="member: 5571">In theory annuitization is a powerful concept, and helpful when thinking about streams of money in terms of a Value and also about a large sum of money in terms of a Cashflow (stream), according to an appropriate discount rate.The issue is that, as an actual product, there are lots of rigid terms and conditions, baked-in fees, spreads, and other factors that make it NOT ideal. You also can't get out of it.&nbsp;&nbsp; &quot;I'd DIE before I sell an annuity. It's meant to benefit the seller, and it's impossible to get out of.&quot; -- Ken Fisher on a TV commercial pushing some annuity-by-another-name...One gives up efficiency/spread and in exchange receives &quot;certainty&quot;. One could also just manage a safer allocation in their own portfolio without the guarantee or middle-men.Some people who have a lot of money may annuitize some of it (regardless of extra costs) because at their level, having a certain limited flow is yet another diversified asset (in addition to their other fixed-income or equity / other investments / etc.).When you do X every week, think about it's value annuitized and what that could grow to over time... nice mental hack.If someone offers you to debase yourself for $Y,&nbsp; annuitize it and realize what a pittance it is (i.e. &quot;months of no rent, but then what?&quot;)... hah, just trying to get it into a more intuitive form.(It's like a more stretched version of the mental hack of imagining every dollar you waste growing at 6% over decades... instead of thinking of each $5 coffee's growth over decades, think about the annuitized value of 10 years of daily coffees, and grow THAT amount at 6% over decades....)./rant</blockquote>

[QUOTE="456, post: 954579, member: 5571"] In theory annuitization is a powerful concept, and helpful when thinking about streams of money in terms of a Value and also about a large sum of money in terms of a Cashflow (stream), according to an appropriate discount rate. The issue is that, as an actual product, there are lots of rigid terms and conditions, baked-in fees, spreads, and other factors that make it NOT ideal. You also can't get out of it. "I'd DIE before I sell an annuity. It's meant to benefit the seller, and it's impossible to get out of." -- Ken Fisher on a TV commercial pushing some annuity-by-another-name... One gives up efficiency/spread and in exchange receives "certainty". One could also just manage a safer allocation in their own portfolio without the guarantee or middle-men. Some people who have a lot of money may annuitize some of it (regardless of extra costs) because at their level, having a certain limited flow is yet another diversified asset (in addition to their other fixed-income or equity / other investments / etc.). When you do X every week, think about it's value annuitized and what that could grow to over time... nice mental hack. If someone offers you to debase yourself for $Y, annuitize it and realize what a pittance it is (i.e. "months of no rent, but then what?")... hah, just trying to get it into a more intuitive form. (It's like a more stretched version of the mental hack of imagining every dollar you waste growing at 6% over decades... instead of thinking of each $5 coffee's growth over decades, think about the annuitized value of 10 years of daily coffees, and grow THAT amount at 6% over decades....). /rant [/QUOTE]

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