Quote:
Originally Posted by aaffmom
My 401K is for my income. For this reason I went with the Prudential Income For Life annuity. 5% guarantee and locks me in to my highest Daily Market Value. Fees are reasonable and I know I am not going to lose my income.
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I am reading a book now ("The Buckets of Money Retirement Solution") that agrees with the use of annuities like this for at least a part of your retirement portfolio. Unfortunately, what the author fails to discuss is that in reality, as soon as you start taking the income, you begin losing money to inflation each year. Depending upon the inflation rate and the number of years, this can be a substantial reduction in purchasing power over time.
That's why the other discussion pertaing to using the annuity of Social Security (by deferring its start) makes sense. Not only is the return higher than traditional annuities, but also it has built in COLA adjustments.