Random Guy,
Thanks for the link.
Vanguard says the return is about 5.2%, I just want to be sure. The calculator at
http://www.tcalc.com/tvwww.dll?CalcLoan seems to confirm this, but it's really a complicated calculation because you are earning interest each day and taking principal and interest out each month for 20 years and I'm not sure if I'm inputting the correct variables.
I haven't read the fine print of the Vanguard contract, I just have a quick quote of their website.
5.2% doesnt sound like a lot and I should be able to beat it by just investing the money in a balanced fund of stocks and bonds. However when I go to other calculators that tell you how much of your savings you can spend, they won't let you take out anywhere near $24000/year at the beginning. Of course they are adjusting for inflation each year which I don't really need to because my pension and SS are adjusted for inflation. I understand that the buying power of the $24K will be eroded each year, but that's something I willing to live with. I could get an annuity that adjusts for inflation and lasts a lifetieme, but I would be 74 before it starts to pay more than the 20 year certain annuity assuming 3.5% inflation.
I'm 64 and have health isssues (heart disease and diabetes) so I think I will be lucky to live past 84.
It'sa big decision, fortunately I have about 90 days to make it.
