People who are looking for steady retirement benefits income cannot rely on a single strategy, says a recent study. The study also stated that the expectations of retirees are very high and contradictory. It pointed out the strategies that offer mental peace to retirees. It also stated that all strategies have their own side effects and none of them can outperform.
The Study Judging the Strategies for Steady Retirement Benefits
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The study also revealed that the retirement income security can be enhanced depending on the withdrawal strategies only when the participants start to withdraw the benefits. But, the goals of every participant can affect the strategy that’s offering the best results for a particular situation.
High Expectations
The study also revealed that most retirees look for many things when they get retired. They want strategies that offer inflation protection, retirement security, asset growth, liquidity and the potential for an estate. All these goals might conflict with each other which make it impossible to satisfy a retiree with a product for the long term.
Peace of Mind
The guaranteed lifetime withdrawal benefit strategies and partial variable immediate annuity strategies perform better when it comes down to offering peace of mind to the retirees. The systematic withdrawal strategy allows for greatest flexibility in the management of retirement assets by the retiree.
The Side Effects
The study has also exposed the fact that there is no strategy that has no side effects. Some of the side effects are high fees that are a part of guaranteed lifetime withdrawal benefits, loss of liquidity that comes by adopting partial variable immediate annuity strategies and less retirement income security which is a part of systematic withdrawal strategies
No Strategy Outperforms
The study also compared the three strategies by making use of the historical monthly returns data. It announced that though many people use their conventional wisdom and put their faith in a guaranteed lifetime withdrawal benefit product strategy because it allows a guaranteed minimum amount of lifetime income, no strategy is a clear winner and can assure steady retirement benefits.
