Articles for Financial Advisors

Annuitization for Retirees

Annuitization for Retirees

Moshe Milevsky is an associate professor of finance at University of Toronto’s business school; he is also a founder of QWeMA Group, a company that develops products for wealth management and insurance, with a focus on retirement income.

By adding an immediate fixed-rate annuity to the asset mix for a retiree, the likelihood of success increases (from 88% to 92%); the amount allocated to stocks also increases, while the expected legacy to heirs decreases. The table below is based on a target goal of $25,000 a year (which will add to the expected $35K a year from a couple’s Social Security). 

Using an Immediate Fixed-Rate Annuity


Without Annuity

With Annuity


50% stocks

40% bonds

10% cash

65% stocks

15% bonds

05% cash

15% annuity




Expected legacy





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