New Academic Research Finds Deferred Income Annuities Reduce Overall Cost of Funding
April 17, 2015
InsuranceNewsNet - Including a deferred income annuity (DIA) in a retirement portfolio
helps reduce the cost of funding retirement while also offsetting risk and providing
asset allocation flexibility, according to a new academic paper authored by Michael
Finke, Professor and Director of Retirement Planning and Living, Texas Tech University
and Wade Pfau, Professor of Retirement Income, American College.
To conduct the research, Finke and Pfau used Monte Carlo analyses to simulate how
an investment portfolio designed to provide $100,000 of real lifetime income behaves,
both with and without the use of a DIA. They ran more than 50,000 simulations and
adjusted for longevity, stock and bond market performance and inflation.
Read more about the study here.