I tried to enter the numbers you gave through the schwab's link, and even Under the deferred payment plan, it appears worse than what you wrote, there is no scheme where one gets the monthly payment than his beneficiaries also get the total original capital invested about his passing Not trying to give you a hard time btw, i'm curious about investing in structured products at the moment so interested in the plans introduced, although I haven't seen anything looking good yet : http://www.schwab.com/public/schwab...ncome_annuity/fixed_income_annuity_calculator The two rows of numbers are Monthly income + minimum payout $3,114 $0 Life Only. You will receive this income for life. However, your beneficiaries do not receive a death benefit once you pass away. $2,894 $347,280 Life with 10 year certain. You will receive this income for life. If you pass away within the first ten years your beneficiaries will receive the remaining income payments until the end of the ten year period. $2,551 $612,240 Life with 20 year certain. You will receive this income for life. If you pass away within the first 20 years your beneficiaries will receive the remaining income payments until the end of the 20 year period. $2,782 $415,000 Life with cash refund. You will receive this income for life. Your beneficiaries will receive a lump-sum payment of the original investment less income payments made to date.
It clearly states you get the principal back, if you pass away within 20 years, but LESS what is already paid, presumably simple summation with no interest bearing. So basically, using the example above for the Life with cash refund option, it equates to 2.5% annualized return for 20 years with no cash payout at the end presuming you don't die. And while you are still alive, or if you die within 12.4 years, they are simply giving your money back to you. You would have made no profit at all if you died within 12.4 years, and actually lose money if you factor in risk free benchmark return as opportunity cost. Your profit starts after you stay alive for longer than 12.4 years. And you basically have to stay alive for the whole 20 to see the roughly 60% gain over the 20 year period. You can probably get better interest rates than 2.5% per year somewhere else or when rates rise. What do they do with the money you invest with them?
This. The issue is they made it a defer annuity: First payment in Feb 2022. If you enter the expected payment start date of today, you will get a ~$1960 monthly + lump sum payment to the beneficiaries. Yes, both you and beefcaketrade were correct, you get a minimum payment of $415K. You win if you live to 105. But your principal is "guaranteed". Best to you.
@algofy WTF are you still doing here? I kid hombre, welcome back. I'm still defaulting on my 23534545 credit cards.
FINE, RELATIVELY safe and guaranteed, if you want to be absolutely literal instead of just understanding the spirit of things. You know when I mean by "safe and guaranteed" rate of return regularly at time period specified. I don't understand WHY you pick on the technicality of words and phrases. For what? To win an argument? This is a discussion not some kind of contest. Goodbye!
Yup. I have not had a mortgage in a long time, nothing like outright owning your home, no car payments either.