Insurers are pushing a new kind of variable annuity as a source for steady payments. But watch out for those fees.
way to create a lifetime income that keeps pace with inflation while allowing you access to your savings for emergencies.
Simply put a portion of your nest egg in a traditional income annuity that pays a guaranteed monthly income for life based on your age. Then invest the rest in a mix of low-cost stock and bond funds that you can tap for the rest of your annual income plus any extra cash you may require.
True, only the annuity portion of your income is guaranteed. But since the expenses in a well-chosen fund portfolio are so much lower than what insurers charge, your chances of running through your fund assets are slim.
Your fund portfolio is also more likely to grow, giving you higher income down the road. So if you're in or nearing retirement, take the gorilla's advice and consider putting money into an annuity.
Just make sure it's not a high-priced fake.
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