Retirement Income: The Final Frontier

With over $16 trillion at stake, there's little doubt that the next great tidal wave of personal financial activity will consist of retirement income for the baby boomers.

What is still hazy is how exactly financial advisors and financial products will serve that activity. Writing for MutualFundWire.com, Sean Hanna reports from last week's ICI conference by offering an assessment of how the mutual fund industry might prevent itself from being left out in the cold...

No one knows how the nascent retirement income industry will play out, no one knows what kind of products will be gain wide appeal and no one knows the role of mutual funds in generating retirement income. [...]

The MassMutual product entry allows investors to allocate their portfolio between an immediate annuity and mutual funds. They are even allowed to reallocate assets back to the funds. Johnson says that while the product only offers mutual funds from MassMutual affiliate OppenheimerFunds today, he expects that a open-platform version of the product will debut down the road.

If retirement income does take off, products like the MassMutual one may be one of the few ways mutual funds can hang on to their assets. As [senior vice president] Tom Johnson explains, products like MassMutual's may be one way for mutual funds to hang on to their customers, and those customers' assets.

Fascinating stuff — and a wake-up call too.