Morningstar Advisor - Spring 2008 - (Page 11) Quick Polls (77 respondents) Assess the state of your clients’ retirement readiness. 52% 36% How do you generate income for clients in retirement? Target-maturity funds Dividend-focused funds and stocks Fixed income Managed-payout funds Annuities 23% 64% 64% 17% 58% 34% 12% 0% hopeless poor not too bad good 0% sterling Other “I use annuities when appropriate. When I use them, I use the living benefit and death benefit ratchets. I generally set up various buckets of money at retirement time: cash, structured notes, CDs, some alternative investments, as well as a welldiversified grouping of indexes for the long-term investments and annuities when I feel they’re warranted.” Timothy Bogert America Group Retirement Strategy Centers, Southfield, MI “We are not big users of annuities in our retirement-income planning. Most annuities are too costly for our liking, and many of our clients are interested in leaving assets to their heirs, which is not always possible with annuities.” Jeffrey Golden Circle Advisers, New York, NY “I use annuities for retirement depending on the situation. I use living benefits risers where applicable. As with everything, it depends on “I do not use annuities, but I’m not necessarily opposed to them. But right now, the fees are too high and the provisions are too tilted toward the insurance company. Overall, we have not yet found that using specific products for retirement makes sense. We focus more on the strategy and long-term cash-flow analysis rather than on the specific products that lock clients in.” Kathleen Kee Pacific Investment Advisors, Portland, OR the objectives and needs of the client.” William Solomon Plainview, NY “I use annuities but not ones with living benefits. It seems like those are more prominent with equity-indexed annuities, and they usually have caps. I think equity pricing in general addresses inflation.” “I use VAs in retirement planning if the client is concerned about market fluctuations and if they want a living benefit. Ninety percent of annuities I use have living benefits. For most clients, this is the primary benefit of a VA. The benefit is to give the client peace of mind when the media screams that the stock market has dropped. They can worry less because they have a living benefit to fall back on. But there is a significant cost to VAs, and they are not suited for everyone.” Gregg Boone LPL Financial, Arlington, TX Peter Rentrop Great American Advisors, Cincinnati, OH MorningstarAdvisor.com 11 http://MorningstarAdvisor.com
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