Have you made any significant financial mistakes over your lifetime? Are you willing to admit them? Apparently lots of middle class Americans would answer “yes” to both of these questions, at least in an anonymous telephone survey.
Archives for September 2012
Insurance companies have pushed hard to sell variable annuities with guaranteed lifetime income riders. These products were attractive to baby boomers who were attempting to build their own “pension.” Sadly, many of these same insurance companies are trying to undo and undercut the vary products that they sold. A recent case in point: Prudential.
Single premium immediate annuities have become more popular as a tool for generating lifetime retirement income. However, immediate annuities are insurance policies that do not make sense for everyone, despite the appeal of having income security. Two circumstances come to mind when you should probably not buy one.
The title of this post – when saving beats investing – may provoke controversy and/or complaints of “it can’t be done.” That’s OK – it is a topic I am interested in pursuing anyway. What I will argue here is primarily for those who are close to retirement and are highly risk averse. These are the folks that have managed to put away a decent sized nest egg that, with a few more years of work and avoidance of losses – can allow them to retire with reasonable safety and a decent standard of living. We are in that category. So what do I mean by asserting that saving can beat investing?