One of the nation's top financial planners is bearish on the recent upsurge in immediate annuity sales.
An advocate of maintaining options and flexibility with retirement planning, this financial advisor sees immediate annuities as too restrictive for many financial plans.
In contrast to the views on immediate annuities, longevity insurance or longevity annuities are discussed in light of the income and asset allocation options they create for retirees:
"Of all the products that are out there, the one that's most intriguing to me is longevity insurance, which is not really good yet. But that's where you put some money away and it doesn't pay off until you're 80, and then it creates an income stream from age 80 for the rest of your life. The advantage of that kind of product is that it allows you to do planning with the rest of your assets using a fixed time horizon. So the major question that all of us have is how long we will live, and longevity insurance allows you to not worry so much about that. For much less cost than an immediate annuity, you can lock in a future income stream, which we think is really intriguing."
The advantages of long-term care are also discussed.
Source: Morningstar
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