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Many of the posts in this forum are negative, or at best lukewarm, on the subject of annuities. I understand that some the negative reaction is aimed at variable annuities, especially those with high loads. The concern may be directed more to the expense considerations than the concept itself. That said, there is a considerable amount of discussion about how to amass a retirement portfolio, and an equally impressive volume of discussion about safe withdrawal strategies, but then predominant consensus appears to be that one should withdraw living expenses from a portfolio throughout retirement, rather than annuitize the capital at the time of retirement. I'm seriously considering the annuitization route, and would like to see if this august group can explain a flaw in my reasoning. I'm not yet ready to retire, but let's pretend I am. Let's also pretend that there is a consensus that a safe withdrawal rate is 4%, that is, I can withdraw 4% of my portfolio each year, increased for inflation, and feel reasonable certain it won't outlive me. I know the debate on this amount isn't completely settled, but let's use 4% and see what happens. I have 1.2 million and I'm going to retire 1 March, on my 65th birthday. Option 1 - Diehards tell me that I can plan on taking 4,000 out each month, and increase that by inflation. (1.2 x .04 = 48K per year). Option 2 - I purchase an annuity through Vanguard. An annuity paying 4,000 per month, increased by inflation, payable for the rest of my life, will cost just over 800k today. Seems life I get to eat my cake, and have almost 400K to play with. Perhaps my relatives aren't quite so enamored with this option. While they profess to being solely interested in my well-being, perhaps they know that if I go with option 1, and die in the next 20-30 years, they will get the remaining estate. They might not admit this, but maybe they will counsel against the annuity because, heaven forbid, if I should get hit my a bus next week, there will be nothing in the will. So let's consider: Option 3 - I purchase an annuity through Vanguard with pays 4,000 per month, increased by inflation, and a guarantee of 20 years of payments. Should I get hit by that bus tomorrow, payments will go to the heirs. Those payments are 960K plus inflation, although in the future. That option will cost me 930K today, leaving 270K to play with, or leave to heirs in addition to the guaranteed stream. Can someone explain why so many in this forum are opting for Option 1? Phil Originally posted in thread: 56170

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