The author went from being a skeptic of SPIA to identifying the right people for SPIAs, and analyzed the Pros and Cons of SPIA.
Pros of Single Premium Immediate Annuities:
- Longevity insurance
- Peace of mind
- Competitive expected return
- Increased safe spend rate for remainder of portfolio
- Inflation risk
- Counterparty risk
- Lack of diversification
- Long term bond-like investment with historically low nominal yields
It's a great read for people who are withdrawing for their portfolios wanting some longevity insurance, as SPIAs can make sense as part of the solution.