An Alternative to Annuities in a Fiduciary World

Therefore, Real Spend can give advisors more flexibility in helping retired clients balance their twin needs of current income and long-term growth for combating longevity risk—the possibility of running out of money while still in retirement.

Real Spend does this in part by actively seeking investment opportunities designed to add value over a more traditional 60% stock/40% bond “balanced” portfolio. For example, Real Spend currently pursues above-average yields by investing a portion of portfolios in ETFs focused on municipal bonds, preferred stocks, and stocks paying relatively high dividends. Real Spend also seeks to deliver below-average volatility through strategies such as emphasizing short-duration fixed-income securities.

While Real Spend is not a guaranteed insurance product, both Real Spend and annuities nonetheless have the same goal: providing investors with the amount of retirement income they need and want. Unlike annuities, however, Real Spend does so while placing a greater emphasis on growing clients’ wealth for the future, with transparent expenses. For clients seeking a moderate or growth-oriented portfolio with an income focus, Real Spend may be a worthy alternative to annuities in the brave new fiduciary-focused world.

This article was written by Horizon Investments, a participant in the ETF Strategist Channel.