Michael Finke of the American College interviews Nobel Prize winning economist Bill Sharpe about his latest research. “Finding a Better Retirement Income Solution” examines the results of his study demonstrating the strength of annuities as retirement income solutions.
Finke says Sharpe is positive about the efficiency of income annuities. Many economists agree on that point. He writes, “If you want to minimize the ‘waste’ of unspent retirement funds while protecting against risk of running out of income, annuities are the best option.”
Maximizing retirement income is another way to minimize potential waste. RetireOne’s Variable Annuities with guaranteed lifetime withdrawal benefits offer even better benefit rates than those used in the Sharpe analysis.
Among his goals, Sharpe is concerned about achieving balance of lifestyle and risk. Like us, he favors establishing an income floor and investing the rest in equities. The RetireOne approach would be to split retirement savings between a VA with a GLWB to cover longevity and lifestyle goals. The remainder would bulk up to 80/20 equity/fixed income for liquidity and legacy goals.
Learn more. See Chapter 19 of Bill Sharpe’s “Retirement Income Analysis with Scenario Matrices.”