The fact that life expectancy for American’s is increasing has led many to have an elevated concern for being at risk to outlive their savings. A recent article by Sharon Epperson highlights this increased concern of running out of money in retirement which is referred to as “money death”. The article points out that in order to address this increasing retirement duration, conventional strategies such as putting more money into bonds and less into stocks as individuals grow older is not a complete fix. According to Barry Gillman, research director of the Brandes Institute, the market risk that this strategy focuses on is not an older investor’s biggest worry. “For somebody who’s at retirement age or fairly soon after retirement age, the real risk is money death.”
The recommended solution presented in this article is to decrease the risk of running out of money in retirement due to prolonged retirement years by complementing conventional investment strategies with “longevity insurance” in the form of annuities. These annuities can be designed to start paying you money at an age when you feel at risk of being low on funds. This article specifically recommends this strategy for individuals who are between 55 and 70 and in good health. To see more, please see the complete article linked here.