Guaranteed living benefit annuity riders: The bottom may be harder than you thought

08/29/2013 | Nerd's Eye View blog

Guaranteed living benefit riders on annuities were designed to promise a basic level income even if retirement investments don't pan out as hoped. However, financial writer Michael Kitces warns that the combination of lower prospective returns and higher annuity costs make guaranteed income riders unappealing because the guaranteed lower income may wind up being the best-case scenario. The article explains the concept and drawbacks of guaranteed living benefit riders and suggests that it may be preferable to buy a single-premium immediate annuity -- or just invest and spend conservatively.

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