[GNC] When income is not income

[Michael or Penny Novack]

On 7/3/2025 8:59 AM, sunfish62 at yahoo.com wrote:
> Michael,
>
> I don't dispute anything of what you say, as you are far more 
> knowledgeable on these subjects than I.
>
> I did, however, have something of a philosophical thought regarding 
> the annuity.
>
> You note that the value of the asset "evaporates" upon death. You also 
> note that the value of the asset does not change with payments to the 
> annuitant.
>
> The philosophical question that comes to me is this: if the value of 
> this asset doesn't change with payments, and disappears upon death, 
> does this asset actually have any real value now?

It is a CONTRACT. The contract guarantees payments of "rents" until a 
conditional event occurs. So at THAT POINT its value "evaporates". But 
it is not an expense like food you buy AND CONSUME. More like food you 
bought, stored, and COULD resell.

WHO receives those "rents" is in question, and where the continuing 
value comes from. You COULD sell that right. However most of us annuity 
holders retain our annuities so I am not recommending marking down to 
market as you age. Let it all disappear when you die (or both of you if 
on more than one life)

Michael D Novack

PS: I was a senior systems analyst/senior business analyst for one of 
the world's largest life insurance companies, so very much my line of 
country. There are a lot of other insurance products where valuation is 
conditional. Insurance is all about conditional events.