Income

Warren Buffett expressed his concerns about budget deficits and inflation risk in a recent New York Times op-ed piece. Asset managers at Pictet and Cie which is Switzerland's largest private bank also have concerns about inflation in the United States, and they are backing this view with part of the $60 billion in fixed income assets that they manage. Pictet is committed to periodic purchases of treasury inflation protected securities ( TIPS ) in light of their inflation thesis. Recent and...

Rockingham Retirement, a British retirement income specialist, suggests that inflation could wipe out the spending power of UK pensioners who are receiving fixed income from standard annuities. The Financial Times Adviser article indicates that a 5 percent rate of inflation could erode 40% of the value of an 80,000 pound pension fund within 10 years. In 1975, following the early 70s recession, inflation shot up from 6.3 per cent at the start of the decade to 24.2 per cent. Five years later, in...

Reverse mortgages and annuities share some key similarities: Both financial vehicles have the potential to provide stable sources of income to retirees. Reverse mortgages and annuities both suffer from relentlessley negative coverage in popular financial media. As a result, reverse mortgages and annuities are largely misunderstood. Objective information and commentary are hard to come by. Even public officials who have responsibility for issues related to reverse mortgages struggle with the...

Income limits on Roth IRA conversions are set to go away in 2010. This opens-up an opportunity for many to benefit from the tax advantages associated with the Roth IRA. Conversion may also make sense as a hedge against the distinct possibility of tax increases and higher tax brackets for future retirees. That said, the Roth IRA also happens to be an enormously efficient vehicle if there is a bequest motive or desire to pass assets to heirs: "if you want to leave a legacy to your heirs, a Roth...

An " in-plan annuity " refers to an annuity option that exists within a 401k plan. The notion of an annuity-based retirement income option within a 401k plan is a relatively new concept. Advocates of in-plan annuities--which include key members of the Treasury Department and Congress--believe that partial annuitization is important for the retirement security of the millions of Americans whose access to stable sources of pension income is largely limited to Social Security . There are, however...