Annuities & Retirement Income
I. The Annuity Puzzle
Most individuals prefer the security and certainty of a pension or a steady income during retirement. Yet most individuals are reluctant to give up a portion of their life savings in exchange for a guaranteed lifetime income stream. Renowned Economist & Nobel Memorial Prize Recipient Richard Thaler attempts to explain “The Annuity Puzzle” in this New York Times article from June 4, 2011. https://www.nytimes.com/2011/06/05/business/economy/05view.html Also, see: https://www.nytimes.com/2017/10/09/business/nobel-economics-richard-thaler.html
II. How Do Annuities Compare with RRIFs?
How Do Annuities Compare with RRIF’s? It make better sense to take the word of an actuary over your Portfolio Manager or your Securities Advisor. Actuary Fred Vettese examines that question in this article enititled, “Surprise: Annuities Beat RRIFs” from May 11, 2013, published in the Financial Post. https://business.financialpost.com/personal-finance/retirement/surprise-annuities-beat-rrifs
III. Consider it a Do-It-Yourself Pension
David Aston, CFA, CMA, MA, writes about personal finance. His article, “Annuities: Your Do It Yourself Pension Plan: Why more Canadians should be using annuities” was published in MoneySense magazine in September 2013. It’s a great summation of how annuities can work for most Canadian retirees. See: https://www.moneysense.ca/save/retirement/annuities/everything-you-need-to-know-about-annuities/
IV. Annuities Deserve a Fresh Look
This study by Rt. Hon Steve Webb seeks an answer to the question, “Where is the cross-over point – that point at which an annuity is preferable to a retirement savings “drawdown?” This article was published in the Financial Times on November 26, 2021. The article and further information about the study can be found here: https://www.ft.com/content/a8efe239-a88f-4496-9810-976824775067
The Rain is Coming. Build an Ark.
The Storm Is Coming and Investors Need a Financial Ark to See Them Through https://business.financialpost.com/investing/investing-pro/the-storm-is-coming-and-investors-need-a-financial-ark-to-see-them-through
by Larry Sarbit published in the National Post, Friday, July 19, 2019.
Readers of this blog will know I’m a fan of Warren Buffett. I’m also a big fan of Larry #Sarbit – one of the most competent and least appreciated portfolio managers in the Canadian Landscape. He’s also one of the best writers on investment wisdom in the country. I encourage readers to click on the link and read this article. It may help preserve your nest egg and save you countless hours of needless worry.
De-Mystifying Buffett’s Investment Success (In Practice)
Demystifying Buffett’s Investment Success by Keyur Patel https://www.cfainstitute.org/sitecore/content/CFAI/Home/research/financial-analysts-journal/2018/ip-v3-n1-13-demystifying-buffetts-investment-success?sc_lang=en
This piece gives a practitioner’s perspective on the article “Buffett’s Alpha,” by Andrea Frazzini, David Kabiller, and Lasse Heje Pedersen, published in the Fourth Quarter 2018 issue of the Financial Analysts Journal. The paper is available under the “Research” tab on this website.