Wednesday, September 19, 2012

Advisor Perspectives column for September: Systematic Withdrawals and Annuities

My September column at Advisor Perspectives is now available, "Your Clients' Toughest Retirement Decision: The Debate Between Systematic Withdrawals and Immediate Annuities." I attempt to present the case for each type of income strategy.

This column is generating some reader feedback suggesting that it is nuts to even consider immediate annuities now in the low interest rate environment. The reality is that now is a very expensive time to retire, and that any sort of retirement income tool/strategy will be hit by the low interest rates. I have not been persuaded that immediate annuities are hit harder, relatively speaking, than other strategies. Thus, I don't think that low interest rates alone are a reason to remove this tool from the list of possibilities.

As well, a very worthwhile read is Bob Seawright's "Five Good Questions for Moshe Milevsky"