Below are my comments to a recent blog post by Dale Roberts Pensionize Your Nest Egg With Annuities, Your Super Bonds.
The author says “…the longer you wait to purchase that annuity, the greater the payments “Possibly so,but how do you know how long to wait? I have a lot of clients who ”waited” and now, due to sickness or death, the extra income is useless. People need to look at their health history and us that as a guideline.
And “stagger your annuity purchases over many years?” 30 or 40 years? In later years, people have long lost in making more money; people just want guaranteed income.The older the person, the less the interest.
“When you die, your money goes to the insurance company” is not correct. You need to differentiate between registered and non registered monies. At the last death with registered money, any remaining capital is taxed with the balance distributed. With non registered money, payments can continue to beneficiaries for the balance of any remaining period. Only then would any other type of distribution take place;as you say you need ”the right buckets at the right time”.
Finally,”annuities are insured by Assuris, which covers 85% of the annuity payment up to $2k per month”. This appears to be a typo; it is 100 % up to $2k a month and 85% thereafter. That’ why we use multiple companies when necessary.