Keeping an emergency fund while augmenting retirement savings.

• Save up one year's worth of expenses
• Keep fund in interest-bearing account
• Invest yearly interest from account into high-yield aggressive-growth stocks
• Continue every year until retirement
• Sell upon retirement and put into interest-bearing account
• Create cash flow with money based on expected age of death
• Use the annuity to augment retirement savings

Example:
• One year's expenses: $25,000
• Kept in money market account: 4%
• Yearly interest earned: $1,000
• Invested in stocks averaging 18%
• Age of beginning investment: 30
• Age of retirement: 65

Amount earned at age 65: $1,816,652
• Invested at 4.5% in money market account

• Two options

1) Create a perpetuity
⁃ Money ($1,816,652) is invested at 4.5% and the yearly interest ($81,749) is drawn out at the end of the year to supplement next year's retirement income. Invested in a separate money market account (at 4%) for general retirement income. Assuming biweekly payments, this method earns you an extra $3,209.93 every two weeks to supplement the primary retirement savings. This creates a near-guaranteed supplemental income for the remainder of the person's life.

2) Create an annuity
⁃ This method requires an assumption of the length of investor's life. Calculations are based on retirement at age 65 and death at age 100. Money ($1,816,652) is invested at the same 4.5% (no need to transfer the supplemental money to the primary money market account) earning a biweekly annuity payment of $3,966.40 until age 100.

Comparisons: Biweekly Payment: Remaining Amount at Age 100:
• Perpetuity $3,209.93 $1,816,652
• Annuity  $3,966.40 ø

-Difference $756.47 $1,816,652