About assets to be annuitized
Under Retirement Accounts/Smooth Withdrawals, ESPlanner asks the user to specify percent of assets to be annuitized. Does this refer to self-annuitization, or does this refer to annuities that I plan to buy? I don't plan to purchase any annuities at this point.
Thu, 05/09/2019 - 12:01
That refers to the percentage
That refers to the percentage of your existing retirement assets that you'd like to annuitize. That is, retirement assets that you'd like to convert to an inflation-index annuity. Leave it at 0% if you do not want to annuitize any of your retirment assets.
Thu, 05/09/2019 - 12:09
Will you clarify? What do
Will you clarify? What do you mean, "that you'd like to annuitize?"
Thu, 05/09/2019 - 12:14
I assume that ESPlanner will
I assume that ESPlanner will recommend annual spending targets. My intent is that 100% of my retirement accounts will be spent on living expense in my lifetime. I don't plan to reserve money from these accounts for my estate, or to buy a second home--nothing like that. In this sense, ESPlanner's spending recommendations are a sort of self-annuity. The engine calculates what I should spend, keeping inflation in mind. Is this what you mean by annuitize, or something else?
Thu, 05/09/2019 - 15:24
Yes, I think it's a similar
Yes, I think it's a similar to your other thread. I see what you mean by self-annuitize because ESPlanner is showing "smooth" withdraws. But technically of course they are not an annuity. So for you, you'd want to set it so that you spend 100% of of non-annuitized assets, and you'd want to annuitize 0% of your assets. Furthermore, you want to assume a pretty safe or conservative return so that it's less subject to market whims.