@mcmarasco
"Does anyone know anything about the Voya versions (virtual clones) of PRWCX (ITRAX / ITRIX / ITCSX / ITCTX)? They are open according to M*, but can the average investor purchase them???"
According to test trades I just made, these clones are not available at WellsTrade, Fidelity, TDAmeritrade, Scottrade and Firstrade. I still think that the most attractive option is to get a friend or acquaintance of yours to gift you a share between taxable accounts at a given brokerage.
Kevin

This is a fund designed for tax advantaged accounts. One finds it in individual variable annuities, college 403(b) plans, etc. So the question is: how desperate are you to purchase a PRWCX clone?
You can purchase the ADV class (ITRAX, 1.24% ER) through a Voya Preferred Advantage VA. The annuity itself adds another 0.60% fee. IMHO, that's too high a total cost - the 0.60% annuity fee is about the same as Schwab's, but you're paying up for the fund (it's tacking on a 0.75% 12b-1 fee).
On the plus side, the annuity has no withdrawal fees, the min for the whole VA (all investments) is $5K, and the annual maintenance fee is waived with a relatively low $15K balance. Also, the contract is relatively straightfoward - 50 pages plus fund descriptions, which may sound like a lot, but most of this is required to describe a basic annuity; no bells or whistles.)
Another option is to invest in AZL T. Rowe Price Capital Appreciation. A combined (print) page with all the M* info is here (scroll past the nonexistent analyst report for the rest of the info).
You can purchase this inside the Allianz Retirement Pro® VA. This is a low cost VA, rated one of the top 10 traditional VAs by Barron's a couple of years ago, along with Vanguard/Monumental Life), Fidelity, TIAA-CREF (see embedded graphic) - Top 50 Annuities, May 27, 2013.
The VA costs 0.30% (Base Account, not the Income Advantage Account, which is a more restrictive and costly GLWB rider). The Class 2 shares of the PRWCX clone have an ER of 1.05%, for a combined cost of 1.35%, 1/2% below the ING offering, but still not cheap.
This annuity requires a min of $75K (across all investments), and charges an annual maintenance fee unless the balance is above $100K.
I don't suggest investing in these clones, but since the question was raised about how the average investor purchases them, there you have it. It is possible that other retail annuities offer these clones, though I am doubtful, because these seem to be proprietary clones offered through proprietary VAs (e.g. Voya clone offered through Voya VA).

"Many well-crafted mutual funds are designed to help income investors meet their objectives, whether it be for retirement or to just have some extra cash on hand."
I've always found CS reporting rather shallow. No exception here. The two T. Rowe Price funds on their list, PRFDX & TRREX, lost 35% and 39% in 2008 respectively. Description might better read: "Buy these funds at the wrong time expecting to generate income and you might NOT have any extra cash on hand or retire as early as you'd like.

FYI: If you're an investor looking to boost income rather than long-term growth, you have a ton of great options. Many well-crafted mutual funds are designed to help income investors meet their objectives, whether it be for retirement or to just have some extra cash on hand.
Some of these funds are pure income plays designed for those in or near retirement, while others also offer some nice capital appreciation
Regards,
Ted
http://www.csmonitor.com/Business/Saving-Money/2015/0825/Ten-solid-mutual-funds-for-income-investors

@little5bee, I apologize that I miss-typed. The $5K minimum investment is for retirement accounts, not non-retirement accounts as I stated earlier. The $100K requirement is common across many brokerages. Another approach is to buy direct from the mutual fund company if they have lower minimum. Some may but they requires monthly automatic investment.
At present I like to get into Seafare G&I, institutional share, but don't have $100K and there is no work-around this yet.

@Sven All institutional shares of Thornburg funds are available for $5K (not $100K) for non-retirement accounts at Fidelity.
Aww, man....so I didn't have to give away my first born child to Schwab to buy TIBIX??
:(

@little5bee, All institutional shares of Thornburg funds are available for $5K (not $100K) for non-retirement accounts at Fidelity. These institutional shares are on the Transaction Fee platform, and thus require a transaction fee of $50. Like Bob C eluded to, TIBIX is an excellent choice for those who wish additional foreign exposure.
Each brokerages have different agreements with the mutual fund companies on the investment minimum and for different types of account.

Michael...if you like the idea of divi payors, pay close attention to what Scott recommends for reits...in your deferred account. Always do your own research, but it's worked nicely for me. That's a nice addition to a portfolio.

Personally in regards to real estate, things that come to mind in the moment - may be others, but just throwing some things out... as noted above, always do your own research.
No particular order:
1. Starwood Property (STWD) Somewhat dull, excellent management, not going to be a home run ever but high income that I have a degree of confidence will remain stable and grow. Will benefit from rising rates and the presentation on the company's website has outlined how much they will benefit.
2. Ventas (VTR) Has been obliterated, but high-quality healthcare REIT that is somewhat cheaper in the literal sense now after they did a spin-off. I'm not against the major names in healthcare REITs, but feel Ventas is particularly high quality.
3. Kennedy Wilson (KW). Not much of a yield, but interesting integrated real estate company (not a REIT) that owns real estate and provides services (auctions, etc.) Somewhat volatile. Famed investor Prem Watsa's Fairfax Financial had a large stake in Kennedy Wilson (although I believe a significant amount and possibly all of it is convertible preferred) as of recently, I'm not sure what the stake is at this point. From the end of 2014 letter: "We have invested $629 million in real estate investments with Kennedy Wilson over the last five years. Through
refinancings, sale of some loan portfolios and gains on hedging contracts on Japanese yen, we have received
distributions of $465 million. Our total net cash investment in real estate investments with Kennedy Wilson is
therefore now $164 million, and that investment is probably worth about $350 million. We have yet to sell though,
while our cash flow return of 11.2% is very acceptable. Also, we continue to own 10.7% of Kennedy Wilson
(11.5 million shares): our cost was $11.90 per share, and the shares are currently trading at $26.19."
--
4. Equity Lifestyle Properties (ELS). Sam Zell chaired REIT that is heavily into RV/campground/retirement communities. Lots of waterfront/near water land. Compelling (while not everyone is going to be into RVs, where the land is is the thing) but not cheap at all and not a great dividend. Still, unique and worth having on radar.
I'm trying to post the rest of this but it's not letting me, I keep getting an error.

"As an FYI...If I had things to do over again, I would have started earlier with my income sleeve consisting of dividend paying stocks. Even holding things like JNJ, PAYX, AEP as examples for the last 5 years, I have been astounded with the power of compounding dividends....and when stocks are down, is the perfect time to buy the dividend payers. That's a hint, BTW."
I'll second this....
"Hindsight is always 20-20. No one can predict the future. Make decisions in the present and be at peace with yourself they are the right ones"
...and this.
----
Most of what I own are in individual names, but there are also some mutual funds and a couple of other things, like RIT Capital Partners (http://www.ritcap.com/our-team)
For me, investing is largely a mixture of income and growth, with names that I find attractive/fall into themes that I'm interested or have other aspects that I find compelling. As I've noted before, I particularly like tangible assets (railroads, infrastructure, real estate) and needs (healthcare being a core focus there, along with things like Ecolab.)
There are large dividend payers (Starwood Property, Blackstone, etc), medium dividend payers and small dividend payers that will hopefully grow the dividend over time.
I do feel very strongly about what I consider a portfolio of best ideas. Oddly, I find owning individual names that I have a strong thesis about less stressful than owning funds because there is that connection and thesis.
Personally, while a day like Monday was disappointing and a bummer, with mostly individual names that I consider a collection of "best ideas" (and my best ideas are not going to be someone else's and that's fine), I wasn't like....

.... because I don't plan on selling these names or trying to time them (and a number of them I see as potentially multi-decade holdings.)
I am younger than most on the board and am heavily stocks. I do not recommend that those who are in retirement or nearing retirement allocate in the manner that I do, although I do think there are holdings of mine that are conservative, including Ecolab (ECL)
But yeah, I agree with what Press said: "Your choice is to put it in all at once per Ted's advice....which is sound if you have 10-15 years until retirement, or to invest in increments. Frankly, if you break it down, don't break it down too finely...1/3 or 1/2 at a time.
But you need to get it in play being that far out from retirement. If you see 2 big down days in a row, hold your nose and put the order in."

Thanks Michael,
I'm about 75% equities in a taxable account, and 40% in an IRA rollover, but with additional monies to be put into play on the equity side in both as I described. I tend to shoot for 65-75% equities, but am flexible depending on the environment.
It's a bit more complicated than that, as those percentages include money in bucket 1-type funds for near term spending in both accounts. You may learn more about that as you near retirement. I'm a big fan of that type of mental accounting, and used the last 6 year run-up to fund that cushion. It makes entering retirement a bit less stressful.
What I recently added money to is in Scott's thread..."what are you buying", etc.
As an FYI...If I had things to do over again, I would have started earlier with my income sleeve consisting of dividend paying stocks. Even holding things like JNJ, PAYX, AEP as examples for the last 5 years, I have been astounded with the power of compounding dividends....and when stocks are down, is the perfect time to buy the dividend payers. That's a hint, BTW.
press.

Michael...as they say "time in the market beats timing the market". Unfortunately, moving money out of stocks requires you to be right twice...when to move it out, and then when to move it back in. I must say, if you wanted to scale back, you hit that first item right on the money.
I was faced with a similar question, when I recently retired and the 401K funds were shifted from my employer to Schwab where I control the rollover account. I purposely chose not to invest the equity portion...which turned out ok to this point, as I moved 35% into equities yesterday when the market was down 10%.
Your choice is to put it in all at once per Ted's advice....which is sound if you have 10-15 years until retirement, or to invest in increments. Frankly, if you break it down, don't break it down too finely...1/3 or 1/2 at a time.
But you need to get it in play being that far out from retirement. If you see 2 big down days in a row, hold your nose and put the order in.
Just curious...are the funds taxable when you ultimately withdraw them?

@MikeW: "I reduced my stock fund holdings % in my 401K account down to about 50%." That was a big mistake, get back to 75% as soon as possible. With 10-15 years till retirement, time is on your side.

Hello all,
I greatly appreciate the dialogue from members on MFO as I learn from each of you on a daily basis. I was hoping to get your advice. With the market turmoil, I reduced my stock fund holdings % in my 401K account down to about 50%. I did this two weeks ago. While I was able to avoid some of the carnage, I am now faced with needing to develop a strategy for increasing my stock holdings back up to their target allocation. I am 10-15 years away from retirement and my target allocation is 75% stocks and 25% bonds(38% S&P index, 16% small cap index, 21% international fund index, 20% short-term U.S. Treasury security index, 5% Barclays Capital U.S. Aggregate Bond Index).
I wanted to ask your advice on a strategy for gradually increasing my stock holdings back to their target allocation. I am thinking about increasing this gradually -- perhaps from 50% to 60% and then 60%-70% and finally 70-75%. I could make these moves on a weekly or monthly basis. Would value your advice on whether this makes sense or if you would suggest a different approach. Also, please let me know if you have any thoughts on my asset allocation. I am a member of the governments thrift savings plan so I can only choose their index funds.
thank you!
Michael

As I try to avoid thinking about my 2:30 class, here are the one month returns for liquid alts and the alts to liquid alts.
Ultra-short term bond funds (0.08%)
Best: Oppenheimer Ultra-Short (OSDIX), up 0.15%
Worst: PIMCO Short Term (PSHDX) (0.41%)
Short-term bond funds (0.16%)
Best: US Global Investors Ultra-Short Term Gov't Bond (UGSDX), up 0.54%
Worst: Kinetics Alternative Income (KWINX) (4.42%)
Managed futures (0.50%)
Best: LoCorr Long/Short Commodity Strategy (LCSAX), up 6.57%
Worst: Catalyst Time Value Trading (TVTAX) (14.77%)
Market neutral funds (0.90%)
Best: Hussman Strategic Growth (HSGFX), up 8.0%
Worst: PSI All Asset (FXMAX) (11.67%)
Retirement Income (3.15%)
Best: Wells Fargo DJ Target Today (STWRX) (0.94%)
Worst: Deutsche LifeCompass Retirement (SUCAX) (5.05%)
Conservative allocation (3.57%)
Best: a handful of weird special use funds
Worst: Federated Managed Volatility (FVOAX) (8.30%)
Long/short equity (4.82%)
Best: Otter Creek L/S (OTCRX), up 2.4% with BPLEX close behind
Worst: Giralda (GDAMX) (12.96%)
Moderate allocation (6.12%)
Best: Avondale Core (COREX) (1.10%)
Worst: HCM Tactical Growth (HCMGX) (14.67%)
David

MJG makes a good case. Having a 100% equity portfolio may prove disappointing and/or disastrous if a bear market hits right at or near retirement.

Hi Guys,
Peter Lynch made a rookie blunder when he recommended a survivable 7% withdrawal rate for a retirement portfolio. He based the faulty endorsement assuming historical average portfolio returns with zero volatility, zero standard deviation in those returns.
During retirement, portfolio returns variability is a killer.
One early critic of the erroneous Lynch analysis was the team from Trinity University. Their work became known as the Trinity Study. The professors, Philip L. Cooley, Carl M. Hubbard, and Daniel T. Walz, published a paper titled “Retirement Spending: Choosing a Sustainable Withdrawal Rate”.
They basically concluded that something like a 4% annual drawdown was more realistic in terms of portfolio survival. Here is a Link to a recent Forbes article that reviews the work:
http://www.forbes.com/sites/wadepfau/2015/06/10/safe-withdrawal-rates-for-retirement-and-the-trinity-study/
Much work has been done to update these findings. The Monte Carlo simulation codes are terrific tools to assess permissible withdrawal rates. They are now accessible on the Internet. These codes permit the user to explore countless scenarios in a quick and convenient way. The basic output is a portfolio survival estimate. What-if scenarios can be used to test the robustness of various portfolio construction options.
Here is a Link to the easiest code to input. It is on the MoneyChimp website. It is not the most sophisticated code, but it demonstrates the power of this tool:
http://www.moneychimp.com/articles/volatility/montecarlo.htm
Note that since these simulations are based on random return selections that are coupled to the statistical input, results will vary somewhat even for identical inputs. That’s the nature of market uncertainty that is captured by Monte Carlo methods.
I hope you find the references useful.
Best Regards.

Peter Lynch recommended a 100% approach in one of his books. He claimed he had his analysts calculate what would happen if a retired person placed all assets in the market and concluded that a 7% withdrawal rate would work even if the market crashed during that person's retirement. I wonder if Lunch still believes that.

One Article linked here states the following:
"The cumulative dollar amount invested into ALL QLACs across all retirement accounts may NOT exceed the LESSER of $125,000 (original regulations were only $100,000), or the aforementioned 25% threshold."
Can I assume that when doing this calculation that I combine all retirement accounts (tax deferred as well as tax free), not just the IRA accounts impacted by RMD?

I think the wording wasn't great. Short answer, no (or better stated, I don't think so).
There are two separate limits; you have to satisfy both of them:

• $125K total QLAC purchases inside your TIRAs, 401(k)s, 403(b)s, etc.
• 25% of each 401(k) balance (for a QLAC within that 401(k)), and 25% of combined TIRA balances (for QLACs in one or more of the TIRAs).

http://www.cpapracticeadvisor.com/news/11651859/irs-issues-new-regs-for-longevity-annuities-exempt-from-rmd-rules
" Specifically, the amount of the premiums paid for the contract under an IRA may not exceed an amount equal to 25 percent of the sum of the account balances ... of the IRAs (other than Roth IRAs) that an individual holds as the IRA owner."
http://www.irs.gov/irb/2014-30_IRB/ar07.html
So you're not allowed to count your 401(k) or Roth IRA balance in computing how much you're allowed to buy within an IRA. That's limited strictly to 25% of the TIRA balances.
It gets even more complicated if you've already purchased a QLAC. Those premiums count toward the $125K max (and toward the 25%). The value of the QLAC also counts towards the value of your IRA (increasing the denominator for the 25% calculation).

With regard to using Roth IRA dollars for longevity risk Julian commented at the end the kitces article with this:
"I agree with you that there are better hedges for old age than longevity annuities. In a Roth IRA or non-retirement account, one option is to purchase U.S. Treasury STRIPS that mature at perhaps 80 or 85 years of age and at maturity time, buy an immediate life annuity with the proceeds. This has several advantages over a longevity annuity purchased years or even decades in advance: (1) the bonds can be cashed out prior to maturity and may be worth considerably more than their cost if held for many years, (2) the counter party risk (i.e., of an insurance company going insolvent) is eliminated, (3) not all -- or any -- of the maturing bond proceeds have to be committed to the immediate annuity, and (4) if one spouse dies -- or has significantly impaired health -- prior to purchase of the immediate annuity, the immediate annuity can be written for larger annual payouts than would be possible with a longevity annuity (e.g., written as a single life annuity or an impaired life annuity). By my calculations, if I purchase the STRIPS around age 60, then after about age 80-85, the IRR with this method is about 50 bp less than with a longevity annuity. However, this seems like a small price to pay for the advantages and flexibility outlined above."

Hopefully a QLAC calculator will answer this question soon.

Yep - good questions bee. I'm assuming you looked at the Fidelity calculator msf already linked. It does allow you to set the time you start receiving funds (but assumes an immediate investment). Probably doesn't go far enough to answer your question.
If I wanted to dig deeper today (I don't) I'd just take one of the readily available compound interest calculators and run some hypothetical amounts on my own over the same time periods comparing the to how I'd fare with the annuity. What the annuity offers is a degree of certainty on payout - while the markets can go anywhere over shorter terms. Also, that you won't outlive your income stream. But - Yikes, at 85 how many good years will most of us have left to pursue our interests?
My problem is that I have converted enough to Roths where more than half of retirement funds are now exempt from RMD. So, RMD isn't going to impact me much. I'm already taking out each year more than the required RMD amount would be on the non-Roth investments. But, I wouldn't mind sinking a relatively small amount into one of these products.
Sorry I can't answer your questions.

One Article linked here states the following:
"The cumulative dollar amount invested into ALL QLACs across all retirement accounts may NOT exceed the LESSER of $125,000 (original regulations were only $100,000), or the aforementioned 25% threshold."
Can I assume that when doing this calculation that I combine all retirement accounts (tax deferred as well as tax free), not just the IRA accounts impacted by RMD?