With millions of baby boomers headed to retirement without old-fashioned pension plans as safety nets, here is a product that would seem to have big appeal: a guarantee of lifetime income from a portfolio of ordinary mutual funds—however long the investor lives and even if the stock market tanks.
That’s what the life-insurance industry thinks. For years it has sold income guarantees on variable annuities, but relatively high fees have limited the popularity of those products. Now, insurers are starting to offer a cheaper guaranteed-income product that they hope will sell better. But there are lots of issues for potential buyers, including questions about cost—still—and the ability of insurers to fulfill the promises they make.
Read the full article at the Wall Street Journal.