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Portfolio > Mutual Funds

Mutual funds and GLB annuities address retirement income challenges

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Guaranteed lifetime benefit annuities are under serious challenge as the major product solution for producing a stream of income over a retiree’s lifetime. The mutual fund industry is quickly developing its own set of solutions to address longevity and the other primary retirement risks, says James Sholder, a Principal in the Diversified Services Group Inc.’s Retirement Practice.

DSG released findings of its 2008 Retirement Income Products and Solutions Study; this is the 9th annual report. According to DSG, the study has been designed to provide a timely view of industry product sales, new product and solution development trends, competitive behaviors and future insights on the ever evolving retirement income market.

Findings of the study include:

  • An increasing number of GLB owners are now using these benefits to receive an income stream via withdrawals or, to a lesser extent, annuitization.
  • Many companies are beginning to address the health care risk for retirees and soon will be introducing new versions of annuities and life insurance with long term care riders.
  • The insurance industry intends to compete with an ongoing array of product solutions, while the mutual fund industry will focus more on an advice first approach to the retirement income market.
  • Companies are beginning to show progress in addressing the middle market using more simplified solutions and efficient delivery mechanisms.


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