Mutual Fund Companies are Stepping in to Assist Baby Boomers with Retirement Planning

New Funds for Retirement Payouts, smart money, WSJ.com, Oct. 14, 2007, discusses several approaches to managing retirement accounts that are offered by various mutual-fund companies.  Here is the introduction to this article:

How can you make your retirement savings last as long as you do? That’s the trillion-dollar question, as millions of baby boomers start to decide what to do with their workplace savings accounts.

For decades, financial planners and insurance salesmen have offered answers — and products and services. Now the mutual-fund industry has jumped into the fray.

This fall, Fidelity Investments launched 11 Income Replacement Funds, followed by Vanguard Group, which announced plans to offer three Managed Payout funds.

Both companies have paired investment portfolios with monthly withdrawal plans. They’ve also replaced the traditional focus on guaranteed income with payment streams that could vary from year to year — a novel idea, and one that may give retirees more spending power.

But that’s where the similarities end.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.