For the last year or so getting a 5% (1-3 yr) CD was not unheard of, so literally leaving it in a bank account is better than the annuity option by the above poster’s math.
I don’t think you quite understand what I mean. You can’t extrapolate from the last 3 years. What you can extrapolate from is longer periods of time, where we occasionally see assets going generally down for some time. So you have maybe 90% chance of your stock portfolio going up in the next 5 or 10 years, and 10% chance of it going down (rough numbers but the point holds).
So you can end up in a situation where you lose money, but it’s unlikely. If you are very risk averse, you would prefer a 0% increase over these odds.
For the last year or so getting a 5% (1-3 yr) CD was not unheard of, so literally leaving it in a bank account is better than the annuity option by the above poster’s math.
I don’t think you quite understand what I mean. You can’t extrapolate from the last 3 years. What you can extrapolate from is longer periods of time, where we occasionally see assets going generally down for some time. So you have maybe 90% chance of your stock portfolio going up in the next 5 or 10 years, and 10% chance of it going down (rough numbers but the point holds).
So you can end up in a situation where you lose money, but it’s unlikely. If you are very risk averse, you would prefer a 0% increase over these odds.