Fidelity Targets Retirement Income Needs
Kurt Brouwer October 13th, 2007
This particular topic is a pretty hot one in the relatively staid world of mutual funds right now. Essentially, mutual fund companies want to compete more effectively with life insurance companies in meeting the retirement income needs of millions of upcoming Baby Boom retirees. Unfortunately, the topic is littered with appeals to emotion and confusion over how income is defined, but that’s nothing new, whether we’re talking about insurance companies or Wall Street.
Susan Kelly at Financial Week reports, Fidelity Seeks To Provide Cash for Retirees With Income Needs [emphasis added]:
‘…Brokerage giant Fidelity Investments today rolled out two new products—a set of mutual funds and a variable annuity—designed to help baby boomers turn their nest eggs into a steady stream of retirement income.
“What we hope these two products do is add another option in the solution set [baby boomers] have for their retirement income,” said Boyce I. Greer, president of the fixed income and asset allocation division of Fidelity Management & Research.
As the 78 million baby boomers begin to retire, the financial services industry is increasingly focused on the issue of generating income for them in retirement. That is perceived to be a bigger problem than it was for earlier generations of retirees because boomers are less likely to have traditional company pension plans, and their Social Security payments will replace less of their pre-retirement income. Last week Vanguard announced three Managed Payout Funds, funds of funds that help retirees generate income from their investments by providing monthly payments.