Hi Jan,
We are continuing our guided tour through the third edition of the Retirement Planning Guidebook, and this week the focus shifts to one of the most debated topics in retirement planning: annuities.
In both the article and this week’s podcast episode, we walk through how contractual income works, how longevity credits differ from bond returns, and why annuities are better understood as risk pooling tools rather than investment substitutes. The goal is not to take sides in a product debate, but to clarify where contractual income fits structurally in a retirement plan.
| | | | Creating an Income Floor with Contractual Income Retirement income can be built in two fundamentally different ways. You can rely on markets and portfolio growth to fund withdrawals, or you can rely on contractual income backed by legal guarantees. Most retirement plans use a mix of both. The real decision is how much of your retirement lifestyle you are comfortable leaving exposed to market outcomes.
By Retirement Researcher | | | | Balancing Insurance and Investments in Retirement Planning Retirement income planning is one of the most important challenges in financial services today. People are living longer, traditional pensions are less common, and Social Security alone often does not provide enough to cover the lifestyle many retirees hope to maintain. The responsibility now falls on individuals to turn their accumulated savings into a reliable stream of income that can last for decades.
By McLean Asset Management
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The Annuity Debate: Smart Strategy or Overpriced Product?
In this episode of Retire With Style, Wade Pfau and Alex Murguia continue their chapter by chapter discussion of the third edition of the Retirement Planning Guidebook, focusing on annuities and risk pooling. They unpack how longevity credits work, clarify misconceptions about fees and returns, and explain how different retirement income styles may or may not incorporate annuities into a plan.
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