[DesertCat]

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Or at least that is the plan. She is 8 months old. I just bought her a $10k Vanguard variable equity/bond annuity, and by the time she reaches age 65, it should be worth around $1M in real terms (assuming the markets cooperate and inflation doesnt go crazy). Clever plan, no?

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Nope. Assuming 3% in annual inflation, this means you are assuming around 11.4% in annual return from an equity/bond annuity, after fees. Will never happen. At best you will see 8-9% annualized, or 5-6% after inflation, and end up with $440,000 in real money. Or worse given the forced insurance associated with annuities.

And why do you say "equity/bond" annuity. The moment you put bonds into the mix you are lowering your long term expectation. If you have such a long time horizon, I'm assuming you know to stick it all into an index fund?

In the end you'd might do better for her putting her in the total stock market index or some other index. You save .3%-.4% a year in annuity costs, and an index fund is almost as tax efficient as an annuity and has no 10% tax hit for early withdrawals.

But if you have to do an annuity, you've picked the right place, Vanguard's costs are very low. As has already been pointed out, add a thousand or so a year and you'll hit your goal pretty easily.