Welcome to the Stay Wealthy podcast. I'm your host Taylor Schulte, and today I'm breaking down the pros and cons of two more popular retirement withdrawal strategies. The first is an immediate payment annuity, also known as a single premium annuity or SPIA, and the second is dividend stocks. To grab all the links and

resources mentioned today, just head over to you staywealthy.com forward slash 123. So a few months ago,

a listener emailed me with a great question. She asked, what do I do if I want to run all of my

retirement accounts down to zero, down to zero dollars?

We don't have any errors, we aren't charitably inclined, and we know that most retirement withdrawal strategies take a conservative approach and leave most people dying with money in the bank.

So what's the most prudent strategy if we want to enjoy retirement to its fullest

and eliminate the risk of outliving our money while also making sure that we don't leave a

healthy chunk behind at death? The short answer to her question is to buy an immediate payment

annuity. But there are a number of things to take into consideration here that aren't

obvious on the surface. Before I dig into those, let's just first touch on the basics of an immediate

annuity, again, also called a spia, which stands for single premium immediate annuity. A spia

is the most basic type of annuity. You write one single irrevocable check, meaning you don't get the money back.

You write one single irrevocable check to an insurance company, and in return, they give you an ongoing guaranteed stream of income for a specified period of time.

It could be five years, It could be for the rest of

your life, your spouse's life, or until both of you pass away. There are a number of different

options you can choose that will reduce or increase your guaranteed income amount. For today,

we're going to keep it really simple. Let's just say the husband and wife are both 65 years old,

and they have a total of $1 million in retirement savings. They want to die with as little money in the bank as

possible, and we'll want to maximize their retirement income by using an immediate annuity.

As a general rule of thumb, a non-inflation adjusting

immediate annuity for a joint policy at age 65 pays about 6% of the balance, or $60,000 on a $1 million

policy. Again, this covers both spouses. So if spouse A passes away tomorrow,

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