The Role of Inflation-Indexed Annuities
by Paula Hogan
The decline of defined-benefit pension plans means that the average citizen is now responsible for building a personal portfolio, managing that portfolio, and then, in retirement, deftly withdrawing from that portfolio just the right amount of cash each year for living expenses.
Adding salt to the wound, increasing longevity means we can potentially expect to live several decades after leaving the workforce. These two facts put a lot of pressure on individual investment performance, turning retirement planning into a high-stakes game.
But none of us are born knowing how much cash can safely be withdrawn from a portfolio, and few of us know how to effectively manage investments over the long term.
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