Inflation

There is a very good article in Investment News about retirement planning and, more specifically, devising appropriate withdrawal and income strategies in retirement. The author discusses the nature of various income requirements and makes the entirely appropriate point that all income needs are not created equal. For example, travel desires obviously differ from essentials such as food and shelter. There are also different inflationary characteristics that need to be taken into account. Health...

AARP has published a tip sheet called Money Matters that offers advice on spending down one's assets in retirement. The tip sheet addresses a number of areas, including: When to claim Social Security . Asset Allocation . Annuities. Withdrawal rates. The role of one's home in retirement planning . For each topic, AARP offers a description of common or current practices, conventional wisdom and their general guidance. With respect to annuities, AARP notes that most people pay very little...

Politico recently reported on the possibility of a concerted attack on the U.S. dollar which, if valid, could have a meaningful impact on annuity owners and other recipients of fixed income . The story suggests that Arab oil sheiks are conspiring with the Chinese and Russian governments to eliminate the U.S. dollar's role as the reserve currency in the global oil trade. The dollar's role in the oil trade serves as a linchpin for its relative strength and role as the world's overall reserve...

Putnam Investments CEO Robert Reynolds spoke about the notion of "lifetime financial product allocation" at a recent industry conference. Reynolds supports the notion of a range of products over the course of one's lifetime that include: Lifetime income options to hedge against longevity risk . Relative return strategies to hedge inflation risk . Absolute return strategies to deal with both inflation and volatility risk ( sequence of returns risk ). Reynolds offered comments on the over-...

A director of one of the U.K.'s larger annuity brokers suggests that inflation could result in poverty for many U.K. annuity owners. In a piece titled "The Great Annuity Scandal," Steve Hunt expresses his concerns about annuity owners who are unaware of the risks they may face over the next several years: Inflation may not be a problem now, and who knows when it will return, but return it will - that is a given. The vast majority of annuity sales are level (and a great many single life). At...