Part 6/8:
Thus, if not all necessary expenses are guaranteed through pensions, annuities, or Social Security, diversified investments, including bonds or cash, can help provide stability and safeguard against market downturns.
The Case for Annuities Over Bonds
Notably, experts like Wade Pfau endorse the idea of favoring annuities over traditional bonds for retirement planning. Annuities don’t subject retirees to market fluctuations since they provide guaranteed returns, unlike bonds whose market value can vary. Additionally, retirees can’t outlive their pensions or annuities—providing a compelling advantage over bonds.