Income

Some of the nation's most prominent financial advisors are looking at annuities in a new light. Partial annuitization to ensure a base of stable income is discussed. Think twice if you are at or approaching retirement and you are not able to at least have a basic annuity-related discussion with your financial advisor . "At the end of the day, investors want to know they can withdraw X amount of dollars [a year] for life. That's why it makes a little more sense than it ever has before," he says...

Interest rates in many countries are at historic lows as a result of monetary policy that is intended to address the financial crisis. This low rate environment will have a profound impact on the finances of many retirees since interest rates are a key ingredient in annuity payments . "Thousands of savers who are about to retire could lose hundreds of pounds each year because leading pension firms have cut their annuity rates over the last two weeks, with Norwich Union, Standard Life and...

Use of annuities seen as an effective way to lock-in guaranteed income for retirees. Mandatory participation through private sector plans is suggested. Hybrid 401(k)s with built-in annuity options are one possible vehicle. "We also need to consider a new tier of retirement income… The goal of this additional tier would be to replace about 20 percent of pre-retirement income. To accomplish the goal, participation should be mandatory, participants should have no access to money before retirement...

Article encourages partial annuitization through fixed annuities as a prudent approach to planning one's retirement finances. Even if you invest well and diversify your portfolio, you can't be completely sure that you'll outlive your money. That's where putting a portion of your assets into an immediate annuity can be useful -- by guaranteeing a stream of income for life, supplementing what you'll get from Social Security and any employer pension you might receive. Source: Motley Fool Full Story

Barclays and other large asset managers roll-out sophisticated defined contribution plans that have annuity options built into the plans. Employers, however, have been slow to adopt the new programs. If you're approaching retirement right now, there's no easy fix for your portfolio. But if you are in midcareer, you may soon have a chance to structure your 401(k) in a much different way. A dozen or so asset managers and insurers, including AllianceBernstein, AXA, Barclays Global Investors, John...