Turn Your Retirement Savings into Income

With about 77 million people in the boomer generation, the financial industry has always catered to them. And now, heading into retirement, there's no exception to that standard. Fidelity and Vanguard, two of the most respected names in mutual funds, have developed a new product that will make it possible for retirees to turn their savings into monthly income checks—while still having the possibility of earning more money.


Fidelity's funds are designed to liquidate at certain points, usually every two years from 2016 to 2042. The idea is that your money, plus investment gains, will be returned to you in the form of a monthly income check over the life of the fund. Early on, the fund will be focused on growth with a large chunk of money in stocks and then as the investment nears the end, it will switch more and more over to conservative funds.


Vanguard has a slightly different fund up their sleeves. Their funds are largely modeled after university endowments. Like endowments, these funds aim to leave the principal intact. Investors will be able to choose from three portfolios: Growth, which seeks to increase the principal; Distribution, which preserves the principal while maximizing the payout; and Growth and Distribution, which looks to find a happy medium between the two.


Either one of these funds sound extremely promising. There are only two areas of concern amongst skeptics. First, this is a completely brand new product that has not yet been tested in real life application, so they expect a bit off loss and confusion at first. Second, they're worried people will confuse these funds with annuities and think they're money is 100% safe. Let's be clear, folks. This is an investment and it could potentially lose value.


Do you think one of these funds could be for you? [CNN Money]