A $400,000 Annuity Guarantees $2,600 a Month for Life, but Here Is the $190,000

A life-only SPIA on $400,000 pays $2,600 monthly but surrenders roughly $190,000 in residual estate value to the insurer at death.

Most of each annuity check is simply return of principal, not yield, and fixed payments lose real value as inflation compounds over decades.

Partial annuitization covers only the gap between Social Security and fixed expenses, keeping remaining assets liquid, inheritable, and invested.

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A 65-year-old retiree with $400,000 set aside is considering an annuity that pays roughly $2,600 a month, guaranteed for life. That's about $31,200 a year, paid like clockwork until they die. No market risk. No sequence-of-returns worry. No spreadsheet to maintain.

It's a tempting deal, especially when the 10-year Treasury has already swung from about 4% to nearly 4.7% over the past year. But there's a trade-off: roughly $190,000 in expected estate value the retiree gives up over a normal lifespan.

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Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/options/articles/400-000-annuity-guarantees-2-143556654.html)