I know the A word is generally frowned upon but does anyone know the details of these? I'm 40yo with relatively low income but have about 1.5mil in rent house equity. We pretty much live off of rental income but as everyone knows rents are stagnant while taxes, insurance, etc are up. I'm recently "retired" and my families healthcare is not a concern. I have good life insurance to get my kids through college but due to recent health problems, more life insurance isn't an option. I worry about my wifes ability to manage the real estate and three young kids if something happens to me. I worry that if she sells the real estate, between that and the life insurance, would it be enough to get her through retirement. So basically, we have some assets but could use the current income and guaranteed long term income. Income "diversification" would be the purpose. Transitioning 100-200k out of rent houses would be fairly painless. The annuity would be nice because it would be zero work and I believe little to no risk?

What company would be best to work with? Can these be set up in my children's names to pay out for their life? I assume the payment would count as regular income for tax purposes?

www.retireyourrisk.org

Have you thought about doing some owner finance or lending the money out? I would think the returns would be much higher however would take little more work. I'm 40 as well and active real estate investor. Would be glad to talk with you.. I was financial advisor in the past and currently own insurance agency. shoot me an email
kyle@maximinsure.com

I ask this respectfully: if he thinks his wife might have trouble managing what they have in their current situation (should something happen to him) how do you think she would handle your idea?

Just buy a bunch of good muni bonds. Tax free income.

Stive said:

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I ask this respectfully: if he thinks his wife might have trouble managing what they have in their current situation (should something happen to him) how do you think she would handle your idea?

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Owner financed sells would be easier to deal with than rentals.

I don't necessarily disagree when it comes to the leg work aspect but measuring the risk, ROR, keeping up with it, etc still falls under the "not sure how she'd manage it" umbrella.

Owner finance = can be some work. Lending money out = very little work. Being an investor I am always looking for private money myself and to me I would think it pays much higher then an annuity. For example I can take $1m and pay 7% to lender. Private lender signs some paperwork for loan docs etc and then just collects my monthly payments I send.

Two ideas.

1. Trade up to something with a more "clip a coupon" nature to it. With $1.5M you could easily get into single tenant industrial or something similar. Obviously the longer term lease the better, help her understand the re-tenanting process if it should go that way, and let it ride. Another angle of this idea would be to sell and invest in the stock market. The Trinity Study says you can safely withdraw 4% per year, so at $1.5M in a vanguard fund she'd have $60,000 before taxes annually.

2. Ride out your current holdings as long as you can, then sell, and do something in #1 above. If you have $1.5M in equity today, you've probably got $4.5M? in total assets. If those grow at 3% per year for the next 5 years, you've probably got almost another $1M in equity? So $2.5M in equity by waiting another 5 years?