Quote Originally Posted by Sgt Pepper View Post
if i elect the pension option it does have the attraction of a unconditional government guarantee.
Govt guarantee is indeed a positive (maybe double check wording on unconditional) but your volume of posts on a shareinfo website suggests you're interested in trying harder than the easiest option.

NPF ought be able to give you an estimate of the annuity. Also ask how it is inflation adjusted.
And ask yourself if you had 250k in cash would you give it to an insurance provider to hand it back to you in drips. Compare their estimate to your own calculation to see if it represents value. For example if you have 24 years left (approx from StatsNZ for a 63yo male??, bit more for female) and netted 1% at the bank you could spend about $13,900 a year over 20 years from 67, extremely low risk, to use all 250k by 87. Of course bank deposits dont account for inflation and if you live longer NFP keeps paying but you can tweak your formula if you think you'll live to 90 or want eg 50k left at 87.

If you then do it yourself with a few lower risk shares and average 3% net (not so hard, see all suggestions above altho the income will fluctuate) your annuity is about $16,800. Focus on industries that are at least inflation resilient then growth is a bonus.

Never simple to make a risk based decision but ensure you have all the variables and assumptions to hand.

Diversification: small point, whatever your view on this, if nothing else, it at least spreads the dividend payments out a bit.