Comparing 401(k) bundled annuity offering with Safe Withdrawal Rate (SWR) approach

https://finance.yahoo.com/news/way-convert-401-k-pension-223434278.html

2019 Secure Act makes it very easy (aka safe harbor) for 401(k) providers to offer expensive annuity contracts within 401(k) plan. So, more and more 401(k) providers are likely to start capitalizing (collecting origination fee/commission from insurance companies) such annuity insurance product offerings.

However, as savvy investor, we should keep an eye on the hefty expenses of annuity products and choose our options wisely.

For example, one cost-effective option to increase guaranteed income is to postpone taking social security benefits and, as a result, collect additional annuity income through increased social security benefits itself. Using such simple approach, one can easily avoid 2-3% annuity related expenses every year.

Above kind of annuity offering from 401(k) plans is expected to provide no remaining legacy value at death, while the Safe Withdrawal Rate approach actually has a whopping 96% probability of having all of the client's original principal still remaining in portfolio, even after 30 years of safe withdrawal. 

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