Ibbotson: Fixed Indexed Annuities Beat Bonds For Retirees
Fixed indexed annuities can do a better job of de-risking a portfolio for older investors than bonds, according to Roger Ibbotson, chairman and chief investment officer for Zebra Capital Management, an independent investment management firm based in Milford, Conn.
According to his latest research, Ibbotson said, uncapped fixed indexed annuities help control equity market risk, mitigate longevity risk and have the potential to outperform bonds in the near future.
“What financial advisors should acknowledge is the immense impact that shifting market conditions, longer life expectancies and uncertainties surrounding the future of Social Security have made on our U.S. economy,” said Ibbotson. “In recent years, we recognized the potential of these conditions to result in a perfect storm where investors may be left with insufficient funds to carry them through retirement.”