Here's an interesting article from Financial Planning magazine ( a publication geared towards financial advisors and annuity salesmen.) I'm always amazed at the creativity that these professionals display in designing ever more complicated, high-commission schemes to separate retirees from their life savings.http://www.financial-planning.com/asset/article/613121/found...Another approach is to deconstruct the traditional annuity by layering a low-cost insurance guarantee on top of a separately managed account. In March, Pershing LLC launched such a hybrid retirement income product, which pairs a managed account solution with a lifetime income guarantee offered by The Phoenix Companies. The product, known as Lockwood Investment Strategies Longevity Income Solutions, or LIS2 for short, will ensure that investors won't outlive their assets, says Len Reinhart, the former president of Lockwood who worked on the product design and now consults for Pershing Managed Account Solutions.LIS2 features a 5% annual payout, after fees, which begins when an investor is 65 years old. The 5% rate is applied to the initial investment for a fixed dollar amount that stays the same each year. For example, an investor who puts $1 million into the product would get $50,000 each year for the rest of his or her life. The Phoenix Companies buys 10-year puts as hedges for the guarantee, which assures consumers of their fixed payout regardless of the underlying funds' performance.</snip>I bet you could index that $50,000/yr. for inflation if the insurance company wasn't skimming off 2%-3% in fees. <LOL>intercst
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