Volatility drives retirees to annuities

This is a well-reasoned and thoughtful piece on annuities, particularly in its assessment of how market volatility and low interest rates may be generating more interest in this financial product.

I would add these points to those already made by the author:

  1. Besides reducing income volatility, an income annuity can simplify the management of your finances. A monthly deposit into your checking account that is guaranteed for life takes one less worry off the table.
  2. An income annuity can be customized to your personal situation. It’s definitely not “one size fits all”.
  3. Income annuities will not reach their full and necessary potential until they are treated like any other asset class, and integrated into retiree portfolios.

Technology is changing how we retire

While this article suggests that there are major new technology trends impacting retirement, I beg to differ.

Trading your retirement portfolio on your mobile phone doesn’t add to your returns. It probably only makes you more nervous.

Technology has to support three key activities:

  1. Analyze millions of real-life scenarios to measure your retirement liabilities.
  2. Scour the universe of financial products (both investment and insurance) to create assets that most effectively cover those liabilities.
  3. Most importantly, simplify the choices for the average investor. The better it does that, the more useful the technology is.