DIY annuity like income stream vs gov/insurance company offer

[Jacinle]

Hi


Hi all
I want to put aside some money to contribute to my parents retirement.

Gov plan:
$100k - 8436 annually / 703 monthly ( whole of life, guaranteed 105% lump sum back ) , fixed, not inflation adjusted


DIY:
Classic 60-40

15 years - SWR: 6% from portfolio charts
$100k - 6000 annually inflation adjusted amount
[to brace for market events, plan to have a larger bucket of 2 years emergency expense]

It looks like DIY give us more flexibility and inflation adjusted, thoughts?

[AMandM]

The government plan isn't adjusted for inflation but it returns much more than your DIY plan.
If your plan is to draw out $6k per year, my first thought would be to take the government plan and invest the extra $2436 along with the extra two years of expenses you would set aside in the DIY plan. It's going to be many years before your $6k inflates to $8436.

[Jacinle]

The government plan isn't adjusted for inflation but it returns much more than your DIY plan.
If your plan is to draw out $6k per year, my first thought would be to take the government plan and invest the extra $2436 along with the extra two years of expenses you would set aside in the DIY plan. It's going to be many years before your $6k inflates to $8436.

Thanks AMandM

This is a good point, at 3% inflation, it would be at year 13 to be at $8436!!! Don't know how I missed that.  Additionally, the gov plan is annuity so if one lives longer there are always still $6000, more risk-free/less management than DIY portfolio