Voices: A skeptic takes a second look at SPIAs

September 23, 2020 by Allan S. Roth

I’m on record as being a skeptic when it comes to single premium immediate annuities.

Just two years ago, I wrote that although an “SPIA is the least ugly of annuities, guaranteed returns from variable annuities are far worse since the return comes in the form of an annuitization later on, at below-market rates rather than cash.” Indeed, buying a SPIA today is essentially buying a long-term bond with a duration of the rest of one’s life at a time when long-term interest rates are at an all-time nominal low.

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Originally Posted at Financial Planning on September 21, 2020 by Allan S. Roth.