Category Annuities

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 […]

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 […]

Annuities IV

Annuities IV     So there are no simple rules to decide if an annuity is appropriate for you. As a general statement, I can see no compelling reason to start considering annuities as part of a retirement plan, until there is better disclosure of the fees and charges that go into the pricing of annuities […]

Annuities III

Annuities III So after having done some preparatory work on annuities in Annuities I and Annuities II , now let’s do a few scenarios with and without annuities.(There is also the  Annuities IV blog the last in this series of four on annuities.) This blog is not the definitive but rather more like an introduction to annuities. […]

Annuities II: (Almost) Everything you wanted to know about annuities, but were afraid to ask

Annuities II: (Almost) Everything you wanted to know about annuities, but were afraid to ask In the Annuities I blog we discussed “what is (the measure of) wealth? Here we’ll discuss what annuities are, what flavours they come in and what are some their pros and cons. (Annuities III  and  Annuities IV are the remaining two […]

Annuity I: What is wealth?

This blog (originally posted in 2007) is the first of a number of blogs pertaining to annuities and their role as longevity insurance. (There are couple of follow-up blogs that you might also be interested to read on annuities at Annuities II: (Almost) Everything you wanted to know about annuities, but were afraid to ask, Annuities […]

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, […]