You may recall that Your Survival Guy warned you about new Vanguard CEO Salim Ramji’s implication that he would bring annuities to Vanguard products. Now, according to Andrew Welsch at Barron’s, it’s happening. Welsch writes:
Vanguard is joining the push to offer investors a regular income stream in retirement. The asset-management company is developing target-date funds for 401(k)s and other employer-sponsored retirement plans that will allow investors to opt for a lifetime annuity.
The move is a reflection that while saving for retirement has gotten easier in some respects, thanks to innovations such as target-date funds, the draw-down phase is hard for some people. Managing cash flows can be a struggle.
“Clients are looking for ways to draw down their retirement savings that is specific and meaningful to them,” says David Stinnett, head of strategic retirement consulting at Vanguard. “This is one way to address that need.”
Action Line: Your Survival Guy is no fan, and I see this as yet another way to charge more fees. This isn’t Jack Bogle’s Vanguard anymore. When you want to talk about a plan for your retirement, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.
