Mixing a fixed-income annuity into a retirement income account provides greater long-term wealth for investors than a portfolio of equity and bond investments alone, according to a study by MassMutual Financial Group.

The study tested the performance of various asset allocations within a hypothetical retirement account over a 27-year investment period from Jan. 1, 1980 to Dec. 31, 2006. Starting with a $100,000 investment, results ranged from $489,346 to $735,292, more than seven times the original deposit, at the end of the 27-year study period.

"Income annuities can create greater cash flow for retirees while also lessening their risk of outliving their savings," said Jerry Golden, president of MassMutual's Income Management Strategies Division. MassMutual also sells fixed-income annuities so it's not surprising that the study would promote the benefits of such plans.

The study found that retirement income accounts are able to benefit from a mixture of equities, bonds and fixed-income annuities. The study recommends that retirees use a process called "annuity laddering" to make incremental purchases of annuity income benefits with assets transferred from mutual fund portfolios over time.

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