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Morningstar posted an article by Allan Roth (an investment writer just in the past year) this morning.
He writes the delaying Social Security until 70 and buying a US Treasury TIPS ladder are risk free inflation adjusted alternatives to purchasing an annuity through an insurance company who’s payments generally are not..
https://www.morningstar.com/funds/hidden-risks-income-life-target-date-funds?utm_source=eloqua&utm_medium=email&utm_campaign=MorningDigest&utm_content=None_75089&MorningDigestUS&utm_id=39201
Enjoy
There’s a bit of smoke and mirrors here. Roth leans heavily on the idea that annuities are just returning your capital, which is true, but then recommends a 30-year TIPS ladder that does exactly the same thing. He even admits it himself.
Also, what if you’re not average? What if you live to 101 and your ladder finishes at 95? Are you supposed to live on thin air?
His alternatives are most likely good advice…for someone who’s financially literate and asset-rich. There’s also the point that Roth is a CPA who can build a 30-year bond ladder in his sleep. I’d suggest the average 401(k) participant cannot, and I’ve read the whole point of embedding annuities in target-date funds is simplicity for ordinary people.
To me, it reads like advice written by an affluent author for other high-net-worth individuals that’s been dressed up as general guidance.
What if you can’t or do want to delay to age 70?