Forget Stocks, Buy and Hold Annuities Instead

In an article posted on the website for Boomer Market Advisor, Kerry Pechter (an industry expert) gives his take on annuities after attending the Retirement Income Industry Association’s spring conference.

Most of the speakers had similar undertones about getting out of the market and older retirees needing fixed assets. Below is the most poweful part of the article:

“In the conference’s featured presentation, finance professor and retirement income expert Moshe Milevsky argued that advisors shouldn’t encourage people who are mortality risk-averse—that is, scared of living to age 95 and running out of money along the way—to invest in stocks. “Risk is risk,” he argued, and people who are risk-averse to mortality will be equally risk-averse to equities.

Such clients should use immediate annuities or, alternately, deferred income annuities (aka “longevity insurance”) to lengthen the lives of their portfolios, Milevsky said. They should buy equities only with money they can afford to lose.

The conference’s overall message, which happens to be RIIA’s theme, is that retirees should buy a “floor” of risk-free income-producing assets before considering equities. After Wall Street’s recent madness, that makes sense.”

For a complete copy of the article, contact me today. Thank you for the tremendous beginning to 2010 and putting June on pace for another record month for Advisors Excel, your firm and your clients.

Stay Focused.

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