"Pete" <nobody[at]nowhere.com> wrote in message
news:1xy5agwx9xbnw.1goyzr1spmscu$.dlg[at]40tude.net...
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This has already been done, FYI.

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Again, it depends on the type of annuity. A 10 year period certain IVA is
going to stop at exactly 120 months following 30 days from the annuity date.
A life contingency cannot be outlived, even a variable one (that's why these
things are the BANE of fee-only advisors that don't know how an annuity
works -- ever wonder how come issuers are taking in $5,000,000 and
$10,000,000 in single premiums on fully loaded products on single and joint
life contracts?).

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Every contract is different. Some never go down, others do, and at varying
rates. The ONLY valid source for projections (which are well and truly
worthless) are the individual issuers. Call Hartford. They have the best
one, with the most history. You'll have some fun with it, too. Great stuff,
from a great company.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/
http://www.creditfixinc.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry. The ISP source of this post is not
monitored. If you want to email me, click on a link.

On Wed, 9 Feb 2005 04:06:02 CST, Brent D. Gardner, ChFC wrote:

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I'm writing some software to evaluate post-retirement financial planning
strategies under a variety of stock market scenarios. One of the issues of
course is whether to allocate part of your assets to immediate fixed or
variable annuities. In order to evaluate IVA's, one needs to know what they
would pay out with different portfolio returns.

For simplification, I'm willing to assume a joint life annuity (with
same-age spouse) and 10 years certain, but I'm finding the information on
IVA payouts is scanty and sometimes contradictory. For example:

(a) Some sources say you cannot outlive an IVA; others say you can if your
portfolio doesn't do well.

(b) Some sources say if your portfolio drops 5% your payouts will drop 5%,
which sounds simplistic to me. Another source cites an example where the
monthly income from a $100,000 IVA that lost 2% for 10 years would drop
from $725 to $200 (!).

I'm only looking for some way to estimate the payouts as the IVA portfolio
value fluctuates over time. Great precision is not necessary.

Pete

On Wed, 9 Feb 2005 07:51:21 CST, HW "Skip" Weldon wrote:

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Skip: Thanks for this link. The site is very well done, but it stops short
of answering my question. It says income from an IVA will fluctuate woth
portfolio performance, but doesn't give you any idea of how much.

Pete

On Tue, 8 Feb 2005 15:11:59 CST, Pete <nobody[at]nowhere.com> wrote:


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While not exactly what you seek, Vanguard <www.vanguard.com> has an
immediate annuity calculator that among other things has a guaranteed
COLA that might be give you some ideas. Keep in mind that the COLA,
unlike stock performance, is *guaranteed* and therefore has a cost.

Directions: Once at the Vanguard site, click on Personal Investors,
Research Funds and Stocks, Annuity Portfolios, Fixed Payment Option
Learn More, and finally, Request a Quote. Then play with the
calculator. (Sorry about the directions, but the calculator is free
and helpful.)



-HW "Skip" Weldon
Columbia, SC

"Pete" <nobody[at]nowhere.com> wrote in message
news:1xarw8klyxlnh$.1i8cgmixzjunj.dlg[at]40tude.net...
- quote -

The payments depend on the type of annuity schedule, and whether or not it
has a life contingency. Plus, payments are going to vary from contract to
contract, depending on the ability of the issuing company to manage their
pool of annuitants (this is done with a faucet methodology), and their own
mortality experience.

What are you trying to accomplish?

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/
http://www.creditfixinc.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry. The ISP source of this post is not
monitored. If you want to email me, click on a link.

I've googled high and low, and cannot find the formula for calculating the
payments from an immediate variable annuity.

Given an annuitized amount of $X, an assumed interest rate (AIR) of Y%, and
a series of investment returns R1, R2..Rt, how do I calculate the annuity
payments?

Thanks

Pete