Retirement income without annuities

Investors may be put off by liquidity restraints in annuities, and wary of hidden fees, according to the Wall Street Journal. The paper cites a 2007 AARP survey that shows the most risk averse investors are also least likely to be interested in annuities. For those investors, the slew of target distribution funds now on the market may be the answer.

Despite lacking a guaranteed income, investors who purchase a target distribution or managed payout fund will get a regular check determined by the fund's performance -- and can move their money any time. Target distribution funds are managed like mutual funds; the fund company makes asset allocations and invest in stock and bond funds. Five companies have released funds like these, and at least two more are planning to, according to the Journal. John Hancock Funds expects to launch a target distribution fund this summer, and American Century Investments and T. Rowe Price Group Inc. are both working on similar products.

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