Category Longevity Insurance

Don Ezra’s “Most people need longevity insurance rather than an immediate annuity” (A review)

 In a nutshell  Ezra argues that the vast majority of retirees will be better of purchasing a longevity annuity rather than an immediate annuity.  He opines that “the so-called annuity puzzle is not a puzzle…(but) if longevity insurance were widely available but still shunned, then that would indeed be a puzzle for social scientists to investigate.” […]

On-track to retirement? Objectives, plans and feedback to align: savings rate, retirement age, and expenses

In a nutshell An annually exercisable feedback mechanism in tax-deferred retirement accounts (e.g. 401(k), IRA or RRSP) is provided to assess whether a pre-retiree is on track to achieve financial objectives for retirement and identify corrective steps required to align plan execution and expectations. Shortfalls to objectives can be eliminated by adjusting: annual savings-rate, retirement age and if necessary the planned retirement […]

Pure longevity insurance payout option in CPP would reduce retirees’ longevity risk

Adding a pure longevity insurance payout option to the CPP would go a long way to ease the pain of private sector employees with disappearing pensions. This blog adds some meat to the proposal I mentioned in last week’s PRPP or expanded CPP? Consider adding a pure longevity insurance payout option to the CPP. The PRPP doesn’t meet […]

PRPP or expanded CPP? Consider adding a pure longevity insurance payout option to the CPP

 The debate whether Canadians would be better of with the PRPP or an expanded CPP was recently reignited with the Ontario government (rightly) re-thinking the wisdom of the PRPP over an expanded CPP. This morning’s news that McKinsey has issued a report (which I have not read and I don’t know who commissioned it) suggests […]

“Research on Annuities” CFA Magazine Letter to the Editor July 2008

“Research on Annuities” Letter to the Editor

Longevity Insurance- What does it buy you?

Longevity Insurance- What does it buy you?   As mentioned often, retirees are exposed to three major risks: (1) longevity risk, (2) inflation risk and (3) market risk. In many ways these three risks are intertwined and they all lead to the possibility of running out of money and/or significantly reduced standard of living before […]

Longevity Insurance (Delayed Payout Annuities)

Longevity Insurance (Delayed Payout Annuities): Forget About Immediate Annuities- The Most Efficient Annuitization is 5-10% of Wealth Allocated to Longevity Insurance!   Scott, Watson and Hu in their Pension Research Council paper “Efficient Annuitization: Optimal Strategies for Hedging Mortality Risk” prove what readers of this website have heard from me many times before (though expressed only […]

Longevity Insurance

(Originally posted July 24, 2007) The uncertainty of one’s age at death, results in the biggest fears of retired persons, i.e. that they’ll run out of assets before they die. The risk of living too long constrains spending during “active” retirement years. Actually living too long reduces or eliminates the estate.   A Longevity Insurance product, […]