Here's an article from Money magazine that lists the three rules for a happy retirement. Their advice:
1. Create a steady income.
2. Keep active -- to a point.
3. Try to control your exit.
My thoughts:
1. I'm not sure about the annuity suggestion in rule #1. I'll need to do a LOT more study of the issue before I make that jump.
2. I believe 100% in point #2. I plan to keep active by volunteering my time as well as keeping up a decent physical regimen.
3. Part of the equation in controlling your own exit is saving enough now so your fate is in your own hands -- not someone else's.
I am very wary of commission-based investments such as annuities, but from some of my reading, I think there are can be some reasonable fixed-rate annuities out there. However I would only do this when interest rates are pretty high; otherwise you are locking in a low rate for eternity. I manage my mother's retirement portfolio and I might consider doing this with a portion of her assets at some point. Not the whole portfolio, because I think I can get higher returns elsewhere. Also I am not aware of any annuities that offer any sort of inflation protection.
Posted by: Barry | January 17, 2006 at 02:27 PM