Insight: Understanding Why Annuities Work Better Than Bonds in a Retirement Income Portfolio
By Wade Pfau
IDEAS IN THIS INSIGHT YOU CAN PUT INTO ACTION
The goal of this Insight is for retirees and their financial advisors to understand why bonds are the least efficient way to fund a spending goal in retirement. Annuities can replace bonds to support a retirement spending goal, and the three articles help to justify why this approach works and why it is okay to use a more aggressive asset allocation with remaining investments.
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About the Authors
Wade D. PfauPh.D., CFA, RICP, Alliance Research Fellow is the curriculum director of the Retirement Income Certified Professional designation and Professor of Retirement Income at The American College of Financial Services in King of Prussia, PA. He hosts the Retirement Researcher website and is author of the book Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement.