Longevity Risk

The risk of outliving one's assets. In other words, the risk of running out of money during retirement. In most countries, average life expectancy has increased dramatically over the past several decades. Longer lifespans are somewhat of a mixed blessing because of the financial burden associated with more years of retirement. Individuals, insurance companies and governments are exposed to the financial pressures created by the need to finance increasing longevity. Longevity risk is a key challenge for many societies around the world.

What to Think When a Financial Advisor Says: "You Know I'm Not a Big Fan of Annuities"

Disdain for annuities is a thread of conventional wisdom that seems to exist among a broad swath of financial advisors.

In fact, many financial advisors seem conditioned to wear...

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Sequence of Returns Risk

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Mark Hulbert on Fixed Annuities

Mark Hulbert is the author of the Hulbert Financial Digest, a popular monthly newsletter that tracks the investment performance of roughly 180 different investing -related newsletters. Hulbert wrote an article on fixed annuities in the business section of the New York Times. In a balanced and informative piece, Hulbert touches on topics that include the following: Annuities and the financial crisis. Annuities in the current interest rate environment. How effective fixed annuities are in...

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Fees, Portability and Fiduciary Risk Continue to Present Hurdles for In-Plan Annuity Market

"In-Plan" annuities refer to the use of annuities within defined contribution pension programs such as 401k plans. The concept is relatively new, but the timing should be a perfect the concept to gain traction: The financial crisis has devastated the portfolios of many retirees and near-retirees. Millions of baby boomers will add to the 70 million or so U.S. residents over the age of 55. People are starving for stable, guaranteed sources of income in light of market volatility and increasing...

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Putnam CEO Advocates New Approach to Retirement Planning

Putnam Investments CEO Robert Reynolds spoke about the notion of "lifetime financial product allocation" at a recent industry conference. Reynolds supports the notion of a range of products over the course of one's lifetime that include: Lifetime income options to hedge against longevity risk. Relative return strategies to hedge inflation risk . Absolute return strategies to deal with both inflation and volatility risk ( sequence of returns risk ). Reynolds offered comments on the over-reliance...

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Sequence of Returns Risk

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