8/8/2013

Columnist Wade Pfau unlocks two primary mysteries of single-premium immediate annuities for advisers: why the present value of SPIAs often exceeds cost, and why they seem to boost equity allocations. Pfau suggests that these mysteries can be solved by planning from the perspective of a client's household balance sheet. He uses actuarial tables to quantify the value of the guaranteed income stream provided by SPIAs.

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