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Financial companies rolling out new products to help baby boomers navigate retirement planning

May 10, 2011

| Money Rates Columnist

The baby boom generation, which includes people born between 1946 and 1964 and is the largest generation in U.S. history, is reaching its retirement years with a lot of trepidation.

A 2011 survey by the Associated Press found that one in four baby boomers say they will never be able to afford to retire because they don't have enough money. Nearly 60 percent say they lost a lot of retirement money during the recent recession, and as a result, 42 percent of that number is delaying retirement.

The problem with retiring

Even those who retired safely and with every intention of staying retired are contemplating a return to the workforce because of stock market losses that diminished their savings.

Part of the problem is that many would-be retirees have their retirement savings scattered over several accounts--company pensions, certificates of deposit, money market accounts, 401(k) accounts, real estate, IRAs and other savings accounts.

According to AP, people want to maintain control over these accounts and the ability to continue to manage them in a way that provides a reliable retirement income.

Retirement investment options

As a result, some major retirement savings account companies have been introducing new programs that help investors maintain control of their finances while maintaining their value into retirement. For example:

  • Vanguard Group recently introduced a product that lets investors roll their 401(k) at retirement into an IRA with an annuity option. Annuities are popular with retirees because they provide investors annual income from an initial lump sum investment, and many financial experts say people should have a basic annuity to cover their basic expenses, including food and housing.
  • The Profit Sharing/401K Council of America is offering its 1,200 member companies - who employ more than 6 million people the same IRA rollover and annuity program.
  • Putnam Investments recently introduced a collection of income funds that help retirees set up a monthly income.

Experts say these products are just the beginning. An estimated 10,000 people a day are turning 65, and that pace is expected to continue for the next 19 years. That's a lot of people who will need help planning their retirement - if they ever get one.

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