smiller Posted December 28, 2009 Share Posted December 28, 2009 Judging from other threads there seem to be a lot of new retirees (or almost-retirees) here so interested in how you've worked this one out... Assuming that you have a portion of your portfolio dedicated to generating low-risk income, have you compared an immediate fixed annuity vs. low risk (government, high-grade corporate, etc.) bonds/bond funds? Bonds seem to be able to provide an income stream very close to an annuity while retaining personal control of the money. Annuities (again, just considering a garden-variety fixed immediate annuity here) OTOH provide virtually no risk and a slightly better return, and no onging management issues. The case for bonds seems to come down to how much you want to retain control of the funds and how much of a hit in return (vs. an annuity) you are willing to trade for it, but are there any other fundamental differences in the case where one is primarily interested in an income stream? Tax-wise they both seem to have their own advantages and disadvantages so I don't know if there is a clear winner there. Thoughts? Link to comment
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