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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Boomer Retirement Income Smackdown: Bond Ladders vs. Annuities |
AdvisorOne - June 13, 2011 - By Joyce Hanson
As the first wave of Baby Boomers turns 65 this year, retirement income is a growing issue for advisors and their clients. The question often comes down to this: What’s the better income producer, a bond ladder or an annuity, and how much will it cost?
The answer, according to industry experts, should depend on a person’s retirement goals and how much money they have to invest. But the reality, they say, is that misunderstandings about the two products often muddy an investor’s decision about which one to buy. This, of course, puts advisors in the position of informing their clients about two very different but equally complicated retirement-income alternatives.
But interviews with several experts show that when discussing bond ladders versus immediate annuities with retiring Boomers, advisors can feel confident in laying out these fundamentals:
Clients who can afford both an immediate annuity and a bond ladder should get both. The choice is not determined by income level, but rather varies by an investor’s goals and comfort level.
If a client can afford to pay for just one guaranteed income product, an immediate annuity is the best way to go because it lasts for a lifetime, and a bond ladder doesn’t.
Even so, clients should avoid putting all of their retirement money into an immediate annuity because they should ideally retain some liquidity in their portfolios.
Investors should avoid bond funds and buy individual bonds instead.
Annuities are generally cheaper to buy because one size fits all, but bond ladders are a good value because they can be custom-tailored for an individual’s spending needs.
And yet, advisors see “a very, very low utilization of immediate annuities” because clients often assume—wrongly—that if they buy one there will be nothing left for their children to inherit, says Michael Kitces, publisher of The Kitces Report and director of research for Pinnacle Advisory Group of Columbia, Md.
“Immediate annuities are nice as a retirement income vehicle, but most people have more goals than just retirement income. Once you start layering other goals in, you begin to have problems,” says Kitces, who is also co-author of “The Annuity Advisor,” a book that discusses what annuities can and can’t do.
Retirement Goals More Important Than Income Level
“We sometimes see even very affluent folks pick up annuities because they want a guaranteed income stream and there’s enough wealth there that they can deal with what’s left over. The challenge for middle-income folks who are struggling with this is that they want some of each an immediate annuity and a bond ladder and they can’t entirely afford some of each. If your income goal is $3,000 a month for life, it may turn out that the only way you can get that is to spend... for the complete article.
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| Stuff to look at |
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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