How can a man sell his retirement, when he is at the limit for his age. 78 is what the actuarial tables say he will reach, and he is 77. $650K is a horrible investment if he has to live 8-10 more years.
Actuarial tables say he’ll probably live about 10 more years.
Life expectancy for a 77 year old man is actually 9.89 years. Life expectancy at birth for a man in the U.S. is 76.15, so by your reckoning, he’d dead. His wife is 69. If the pension is taken as joint survivor, paying the full amount as long as either one is alive, you must consider that her life expectancy is 17.2 years.
The correct way to calculate the value of a life annuity is the sum of the present value of a series of payments (present value means discounted by compound interest) times the probability that the payment will be made. Even for a joint annuity it’s a fairly easy calculation if you can decide what interest rate to use and what annuity table.
The following table gives survival rates in 2015 in the U.S. Predictions about life expectancy are based on the assumption that morality rates in 2015 hold for the future.
Based on this table, the $650k value of a $73k annuity implies a 2.6% interest rate for a single life annuity, and 9.83% for a joint life. Neither seems realistic.
https://www.ssa.gov/oact/STATS/table4c6.html
Clint taught those of us who are 77........ Think 90
At 86 Clint Eastwood produced a movie, from his office on the studio lot that had been his for 30+ years
You say 650K is a horrible retirement investment??? Boy, I wish I had half of that, even tho I am a little older than Bernie. I know a lot of people who wish they had that, or in some cases...any at all.