Paying off mortgage

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?
 
luisHK said:
$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.
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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.:banghead::thumbsdown:

But your principal is "guaranteed".:D

Best to you.
 
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ironchef said:
Ouch, I see my mistake: The default start date was set for 2022 in effect, a defer annuity instead of an immediate. Teach me to check my calculations and when the answer is too good to be true, it probably is. Good catch.:banghead:

Here is the link:

http://www.schwab.com/public/schwab...ncome_annuity/fixed_income_annuity_calculator

For an immediate annuity start date Feb 2017: Monthly income payment now equal monthly mortgage payment. So you basically get a return of your principal every year. First year is $7,172 or 1.7%. Second year and subsequent year's return will be higher. And after your passing, your heir will get the principal back.

Regards,
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Lol @ all the misinformation.
 
Overnight said:
Yes, I read the WHOLE thing. How do you know they are safe and thus guaranteed?
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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!
 
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