Should My 80-Year-Old Dad and 65-Year-Old Mom Turn Their $687,000 Nest Egg Into an Annuity? 'I Don't Think They Realize How Much They're Spending'
The post laid it all out. Their dad is 80. Mom is 65. They've got around $687,000 in investments and roughly $69,000 in annual income from Social Security and a pension. The user considered letting them follow the variable percentage withdrawal method—basically taking around 5.1% from the portfolio each year. That would give them about $85,000 in income annually, which should cover their estimated $75,000 in yearly expenses.
Don't Miss:
—with up to 120% bonus shares—before this Uber-style disruption hits the public markets
Named a TIME Best Invention and Backed by 5,000+ Users, Kara's Air-to-Water Pod Cuts Plastic and Costs —
Still, they weren't fully convinced. "I don't trust that she truly understands how much they spend," they said about their mom, who believed their retirement spending would naturally drop. So the user started looking into annuities. Fixed, guaranteed income for life? Fewer surprises? It seemed appealing, especially for parents with such a large age gap. And they were fine with the idea that it might use up most of the money. "Yes, they won't leave anything to us when they pass, but it would be split six ways anyway," they wrote.
That kind of honesty sparked plenty of responses. Some suggested the VPW method could still work. Others were quick to bring up annuity rates, which in mid-2025 have climbed significantly. Several said that fixed annuities were now paying over 5%, with joint lifetime annuities offering even more for older buyers. That's where the math starts to matter.
The original post didn't specify exactly how much they'd consider converting, but let's say the parents decided to put $500,000 into a joint immediate annuity. Based on current market rates, that could generate around $2,350 to $2,500 per month, or roughly $28,000 to $30,000 per year. Add that to their existing $69,000 in Social Security and pension income, and their total annual income could land around $97,000 to $99,000.
Trending: $100k+ in investable assets? – no cost, no obligation.
But once they commit to an annuity, that money is locked in. It's not available for emergencies, unexpected medical costs, or any big one-time expenses. If they choose inflation protection, the monthly payouts drop at the start in exchange for gradual increases later. And unless they add specific riders, there's typically no money left over for heirs. For retirees focused on guaranteed income and less day-to-day decision-making, it might be worth the trade-off. But for others, the loss of flexibility—especially with a large chunk of savings—can feel like too big a sacrifice.
In this case, the adult child wasn't chasing returns—they just wanted to make sure their parents didn't run out of money. An annuity could help with that. But it's not the only answer. The right move depends on spending habits, health, priorities, and how much they value predictability over control.
Read Next:
This AI-Powered Trading Platform Has 5,000+ Users, 27 Pending Patents, and a $43.97M Valuation —
Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die."
Image: Shutterstock
UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.
Get the latest stock analysis from Benzinga?
APPLE (AAPL): Free Stock Analysis Report
TESLA (TSLA): Free Stock Analysis Report
This article Should My 80-Year-Old Dad and 65-Year-Old Mom Turn Their $687,000 Nest Egg Into an Annuity? 'I Don't Think They Realize How Much They're Spending' originally appeared on Benzinga.com
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
21 minutes ago
- Yahoo
BlinkRx Launches "Operation Access Now" to Accelerate and Scale Direct‑to‑Patient and Direct‑to‑Business Programs
Operation Access Now enables pharmaceutical manufacturers to launch direct‑to‑patient programs within 21 days NEW YORK, August 07, 2025--(BUSINESS WIRE)--BlinkRx, the nation's leading prescription lifecycle management platform, today announced the launch of Operation Access Now, a rapid deployment initiative that enables pharmaceutical manufacturers to build and launch direct-to-patient (DTP) and direct‑to‑business (DTB) channels that expand medication access and deliver pricing transparency in as little as 21 days. This program comes at a moment of growing urgency across the life sciences industry. As traditional access models struggle to meet patient and provider expectations, leading brands are turning to faster, more scalable approaches. BlinkRx's national infrastructure already supports millions of patients across all 50 states. The platform's patient-centric design removes every barrier for patients to start and stay on therapy and delivers significant lift for brands: on average, 52% more patient starts and 41% more fills per patient. With Operation Access Now, the initiative enables: Rapid Stand‑Up: DTP programs that can be operational in as little as 21 days, thanks to BlinkRx's turnkey platform and flexible rules engine. Future-Proof: A modular platform that allows pharmaceutical manufacturers to start with a DTP solution and expand into future capabilities as needs and regulations change. For example, the platform can be deployed for DTB models, and can service both cashpay and insurance patients. Scale: Unique automation capabilities that enable pharmaceutical manufacturers to effortlessly scale based on patient demand and adoption. Legacy DTP solutions, such as copay cards and standalone cash pharmacies, are often costly, inefficient, and prone to patient and physician frustration- causing delays in access, misuse, and poor experiences. BlinkRx's platform addresses these ecosystem issues while ensuring strict regulatory compliance. "Operation Access Now is about removing every barrier between manufacturers and the patients who need their therapies," said Geoffrey Chaiken, Co‑Founder and CEO of BlinkRx. "We're prepared to enable manufacturers to deploy DTP programs and deliver the speed, scale, and flexibility the market demands." About BlinkRx BlinkRx is a Prescription Lifecycle Management Platform that allows the most innovative Life Sciences companies to design every aspect of the prescription journey to unlock branded medication affordability and access for all Americans. Learn more at View source version on Contacts For media inquiries, please contact: Press@
Yahoo
21 minutes ago
- Yahoo
Crocs Sinks Most Since March 2020 on Tariffs, Cautious Consumers
(Bloomberg) -- Crocs Inc. shares dropped the most since the start of the Covid-19 pandemic on a weaker outlook, with the maker of colorful clogs warning that cautious consumers are further pulling back on spending. All Hail the Humble Speed Hump Mayor Asked to Explain $1.4 Billion of Wasted Johannesburg Funds Three Deaths Reported as NYC Legionnaires' Outbreak Spreads Major Istanbul Projects Are Stalling as City Leaders Sit in Jail PATH Train Service Resumes After Fire at Jersey City Station Third-quarter revenue will decline approximately 9% to 11%, the company said on Thursday, well below analysts' average estimate for a gain of less than 1%. On Crocs' earnings call with analysts, executives said they won't reinstate full-year guidance, which it first withdrew earlier this year, due to changing global trade policies. The stock fell as much as 29% in Thursday trading in New York, the most since March 2020. The drop pushed the shares' year-to-date decline to nearly 30%, versus a 7.7% increase for the Russell 3000 Index. Chief Executive Officer Andrew Rees said US consumers, faced with price increases, are behaving 'cautiously around discretionary spending.' This 'has the potential to be a further drag on an already choiceful consumer,' he added. 'They're not even going to the stores and we see traffic down,' he said, adding the current conditions are preventing the company from raising prices to compensate for the impact of tariffs on countries where Crocs produces footwear. Crocs joins companies such as Steve Madden Ltd. and Lululemon Athletica Inc. that have been hit simultaneously by economic uncertainty and higher tariffs on nations such as China, which produces a large volume of apparel and footwear. In the three months ended March 31, Crocs reported that China produced around 22% of products send to the US — a percentage the company plans to reduce. A 'predominant portion' of merchandise also comes from Vietnam, Indonesia, India and Cambodia. Crocs is focusing on managing its expenses through cost cuts, inventory reduction and fewer promotions. 'Crocs might have a tougher time navigating tariff pressures, given its decision to pull back on promotions to preserve brand image,' Bloomberg Intelligence analyst Abigail Gilmartin said in a note. --With assistance from Katerina Petroff and Micah Barkley. (Updates with conference call detail and shares trading.) The Pizza Oven Startup With a Plan to Own Every Piece of the Pie Russia's Secret War and the Plot to Kill a German CEO AI Flight Pricing Can Push Travelers to the Limit of Their Ability to Pay A High-Rise Push Is Helping Mumbai Squeeze in Pools, Gyms and Greenery Government Steps Up Campaign Against Business School Diversity ©2025 Bloomberg L.P. Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Yahoo
21 minutes ago
- Yahoo
This 1 Simple Change in Your Savings Could Earn You Hundreds Each Year, According to Raisin
Taking a passive approach to savings is normal, but not ideal if you want to grow your wealth. If you're among those who think they'll think about finding a better account with a higher annual percentage yield (APY) later, you're not alone, but you are missing out. According to a new survey by the fintech company Raisin, 78% of Americans aren't shopping around for high-yield savings accounts. Find Out: Read Next: That's also 78% of Americans who are leaving hundreds, if not thousands, of dollars behind every year. Find out how simple it is to get a better rate with just a little bit of leg work. Why Most Americans Aren't Earning Enough on Their Savings What Raisin discovered is that most people are leaving money behind simply because they feel like shopping for a better rate is a hassle. As many as 61% of Americans would move their money to another account if they knew they could double their money, but only 34% have actually done so in the past year. The first step to getting a better rate is realizing it's not that big a hassle. The second step is looking at how much more money you could be earning. Be Aware: What a Better APY Could Actually Earn You According to the survey, the average APY on most people's regular savings accounts is around 0.58%. In comparison, many high-yield savings accounts (HYSA) or money market accounts are offering rates around 4%, roughly seven times more than average. Plus, money saved in these types of accounts then earns compounding interest — meaning you earn interest on the interest you've been paid. To look at a comparison, let's say your regular savings account has $5,000 in it and is earning 0.58% APY. That's $29 in interest per year. Now say you moved your $5,000 into an account earning a 4% APY. That would net you $200, with compounding interest. Another reason to move money into a high-yield account is that it helps you to keep up with inflation. If the inflation rate rises, on average between 2% and 3% per year, then you are essentially losing purchasing power on any account that earns you less than that. How To Find the Best High-Yield Savings Accounts When looking for the best high-yield savings account, it's best to choose accounts with no monthly fees, daily compounding interest and insurance from the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) for peace of mind. Comparison platforms can make it easy to find top rates and filter for features that matter most, so you can start earning more without switching banks entirely. Debunking the 'Hassle' Myth Opening a high-yield savings account is easier than you might think: First, compare rates and choose an account with strong terms. You don't have to guess, either — ask around, consult your friends, family and, if you have one, a financial advisor. Second, sign up online. Most only take minutes and require basic ID and bank info. Third, link your primary checking account. You don't need to switch banks; just set up an automatic monthly transfer to build your savings consistently with zero hassle. Why Interest Rates Are Still Worth Watching in 2026 While interest rates fluctuate, and the Federal Reserve Board (The Fed) can always drop rates, the APY on most HYSA will still be significantly better than the average savings account APY. For the time being, many banks are still offering 4% and higher. Opening a HYSA or money market account is one of the quickest and simplest ways to begin earning passive income while saving for emergencies, short-term and long-term financial goals. More From GOBankingRates 7 Luxury SUVs That Will Become Affordable in 2025 This article originally appeared on This 1 Simple Change in Your Savings Could Earn You Hundreds Each Year, According to Raisin
