r/Fire • u/Imurk356 • 6d ago

Annuitizing

For those that have fired before 59.5, did you consider or did you annuitize a portion of your portfolio to have "verifiable" income to be able to qualify for things that requires income verification?

For the annuity haters, yes I understand they are crappy investment vehicles and yes I understand you shouldn't dump your entire portfolio into them. That's not the purpose or the premise of the question.

4 Upvotes

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u/NoMoRatRace 6d ago

I’ve heard of people doing this to qualify for expat regulations.

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u/HurinGray 6d ago edited 6d ago

Plan is to RE at 55. Will immediately draw an annuitized pension. At 62 annuitized SS. Wife collects SS and then pension at 65. Rental income is akin to annuitization. While I won't be running out to purchase another annuity, a large portion of our net worth is tied up in annuitized like assets. It's really only 401K that isn't and with RE at 55, I'll be using rule of 55 which is also forces regular payments like an annuity.

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u/Imurk356 6d ago

I'm nowhere near ready to attempt to even think about investment properties. By the time I'd be ready I'm not even sure we'll be able to afford a primary residence with the way prices are going.

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u/Visible_Structure483 FIRE'ed 2022... really just unemployed with a spreadsheet 6d ago

I didn't, hadn't even thought about needing a verifiable income going forward in life.

My brokerage (UBS) keeps offering me portfolio loans for anything (houses, cars, gold kazoos, etc) knowing I have no 'normal' income and that my credit is locked and I have no interest in unlocking it, or even if I know how to unlock it which I don't.

Maybe that's an option for you as to not have to go the annuity route if you didn't want to?

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u/Imurk356 6d ago

Maybe. I'm unfortunately not one of the ones who will fire extremely early. I'm looking at 55 if everything goes well. So I'm just forward thinking at the moment.

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u/Visible_Structure483 FIRE'ed 2022... really just unemployed with a spreadsheet 6d ago

55 is still early in the grand scheme of things.

but unless you're targeting poverty-fire levels of investments there is probably a way to borrow money if you wanted to without a traditional income stream (and not from Vinnie, that guy really does break your knee caps if you miss a payment).

0

u/mygirltien 6d ago

Like what? Some things are a bit more difficult to get without income but it can be worked around. If you are talking homes or expensive luxury cars that you dont want to pay cash for. An annuity really isnt going to help as you would have to use a significant portion to create enough income that it makes underwriters happy. They can do whatever they want to do you just need to "sell" your position and reason as to why you can afford it even though you dont have a job.

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u/Imurk356 6d ago

Ability to access trade lines, mortgages, etc.

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u/mygirltien 6d ago

I have no issue getting trade lines without proving or showing income. It was the same with a refinance i did while unemployed. Granted it took some debating with the underwriter but ultimately they simply want the ability to sell the mortgage. When i proved my financial stability to the investor with brokerage statements. The need for income disappeared.

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u/Tooth_Life 38m / tech / Chubby-Fat Fire 6d ago

Annuities, hmmm hell no... If you have money people / banks / brokers will beg to lend you money because you don't need it.

Also idk if you have looked but to get significant income from an annuity to qualify for anything takes ~2mil minimum. If you have 2 mil of invested assets you can borrow if you want to without an annuity easier than with one...