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.

"Lock in a Lifetime of Income" with Immediate Annuities

The financial crisis has resulted in renewed interest in immediate annuities which can be used to lock-in stable, guaranteed income for a lifetime. "An immediate annuity can function just like a pension , producing a predictable payout. As the "immediate' part of the name suggests, the distributions start shortly after the money is invested." Longevity risk, inflation protection, how much to annuitize , and adding annuities over time are addressed in this article. Source: Wall Street Journal...

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Am I better off just buying a CD for $100,000 than an annuity? Is FDIC insurance important? Aren't there less fees too?

It really depends on what your overall financial needs are. It is true that a certificate of deposit or CD is insured and less costly than an

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Investment Risk and Longevity Risk Should be Seen as Equal Pillars in Investment Decision Making Process

Longevity risk is increasingly seen as a critical consideration in retirement planning process. Investment risk and longevity risk should be equal pillars guiding investment decisions. Translation: A low-risk investment strategy that generates safe but limited returns – while a comfortable and reasonable near-term investment approach – will not be sufficient to fully fund retirement years that could last several decades. Source: Christian Science Monitor Full Story

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Retirement Planning

Longevity Risk

Longevity

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