I have often made the claim retirement income is optimized only with a source of truly guaranteed lifetime income.
There is actuarial support for this statement and since the burden of proof should be placed on me, I’ll do my best to document this when possible.
Peter Katt, a fee-only insurance advisor, uses deep analysis to test various hypotheses. In this article written for Forbes, he explores the subject of income annuities in retirement planning.
Peter tested income annuities against a few other conservative asset allocation strategies to see which has the best probability for success over the long run. Because none of the alternate strategies are guaranteed each showed possibility for failure for various reasons.
There is no reason why you should take a chance when the goal is to make sure paychecks show up regularly for the rest of your life. If that portion of your retirement income portfolio is guaranteed, you can be much more flexible when investing your remaining assets.
Remember, there are plenty of challenges you’ll face in retirement. Once guaranteed lifetime income is removed from the list, other assets can be allocated more efficiently to give you the best chance of meeting those challenges well prepared.
Don’t ever be afraid to call or email with specific questions and some straight talk regarding an optimal retirement income portfolio.
Bryan J. Anderson
800.438.5121 [email protected]