The Social Security Administration has indicated that one in four 65-year-olds will live past the age of 90 and one in ten will live past age 95. With men and women living much longer than in the past many face a significant concern they will outlive their money.
Many financial planners argue that people will have to be somewhat more aggressive with their money in order for it to last their lifetimes. However, more aggressive investment options mean more risk.
A new product being sold to offset this increased risk is called “longevity insurance.” In essence this works like an annuity. You put money into longevity insurance and upon reaching a designated age, generally 80 or 85, you start to get a monthly payout. Of course this “insurance” comes with its own risk as well, if you do not live past the designated age, you will not receive any payout. As with any investment, be sure to get all the facts about it before you buy.
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