Need an Rx for retirement? The doctor is in.

It took me a long time to get my “doctorate in lifetime income.” The journey commenced once I reviewed my retirement account statement after the dot-com bubble burst.

I felt absolutely nauseous. Losing money did not sit well with my stomach. If a 401(k) had caused me to retch so violently, what retirement product could offer the soothing guarantees that would pacify my risk tolerance and secure my financial future?

I needed a product that would guarantee:

• Principal protection. I wanted to make sure that I would never receive less than I had paid into the account.
• Opportunity for limited growth, based on the market’s performance. I didn’t want to invest in the stock market, but felt that I certainly needed to outpace certificates of deposit, my savings account, and other conservative retirement vehicles.
• A minimum floor on the interest credited. I never, let me repeat, ever wanted to risk losing another penny of my retirement savings as a result of market performance.
• That gains would be locked in annually. If I did earn interest, I wanted assurance that I couldn’t lose it later, regardless of what happened in the market.
• Minimum rates. I also needed reassurance that I would always have an opportunity to earn at least a minimum stated amount of interest.
• Minimum cash values. It was mandatory that my retirement income vehicle offer some surety that there be a minimum level of cash value that was attainable in the event of my death, or even if the market simply never performed.
• A death benefit for my beneficiaries. It was absolutely essential that I have peace of mind knowing that the full value of my retirement account would pass to my children in the event of my untimely death.
• Access to my money if I needed it. Liquidity was important, too. Sure, I could swear that I wouldn’t touch the money down the road, but what if something unforeseen arose? I needed to know that the money would be there for me, if I had no other option. And I wanted several options: the ability to take withdrawals of the cash values each year; the prospect of accessing the monies to fund my care in the event of an unanticipated illness or confinement to a nursing home; possibly even the chance to pull money out through other methods if the need arose.
• Lifetime income I could not outlive. The boomers were about to hit age 65 in droves, and all of the surrounding news scared the heck out of me. Living beyond age 100? Social security failing? Rising health-care costs pillaging nest eggs? No thank you. I was steadfast in the belief that I needed a product that would fund my retirement even if I lived to be 150.

Turns out that the income supplement I yearned for was right beneath my nose. My employer was the leading seller of a new type of retirement product: indexed annuities. Once I learned about this vehicle that seemed too good to be true, I resolved not to let my “retirement internship” go to waste.