Tag Archives | longevity risk

lifetime retirement income products

Lifetime income tackles retirement timebomb

The traditional asset based pension is not usually sufficient to provide a total income that keeps pace with inflation, even with the help of the age pension. A real lifetime pension is one way to preserve old age dignity.

collective income schemes

Schemes designed to deal with longevity risk

With the availability of large pools of retirees, the law of large numbers will start to see a predictable distribution of lifespans around the mean, allowing for longevity risk products. An important development.

capital structure

Balancing longevity and sequencing risk

Low interest rates have created problems for retirees, leading to the threat of a reduced lifestyle quality, running out of cash or accepting the age pension. Taking high risks at this point may make things worse.

lifespan

Why we will live for at least 1,000 years

Over the next few decades, average life expectancies as well as healthy outlier human lifespans could rise substantially due to medical engineering and gene modification. Aging is now better understood than ever before.

three investment risks

The big three investment risks in retirement

Of the major risks in retirement, inflation has the potential to be the greatest. Its incremental yet compounding impact is almost certain to reduce retiree purchasing power significantly over a 20-30-year retirement.

women's retirement

Risk aversion is costing women in retirement

According to CFSGAM’s research, Australian Gen-X women remain most at risk of not meeting their retirement objectives, in part due to an aversion to growth assets since the GFC, despite the market’s recovery.

Longevity risk solutions for retirees

The FSI’s Interim Report observed that the retirement phase of super-annuation is underdeveloped and does not meet the risk management needs of many retirees. The most difficult of these risks to manage is longevity.

We’ll live longer, but what will it be like?

After the age of 65, most people will spend over half of the rest of their lives with some disability or high level dependency. If ever you needed an incentive to save more and stay fit for your retirement, that has to be it.

How long are you really likely to live?

Longer life expectancy means more of us will be living for several decades after we ‘retire’ or stop paid employment. Earning 3-4% in term deposits from age 60 will not be enough if you’re still alive at 90, 100, or 120!

Why we overlook lifetime annuities

Lifetime annuities have some attractive features but remain neglected by most retirees. There are rational reasons for this, which the annuity industry has to overcome if the product is to address more longevity worries.

Why academics like lifetime annuities

Life annuities should be beneficial to rational decision-making individuals in retirement, yet in Australia the number of life annuities purchased remains small, albeit with some nascent signs of growth.

Mortality risk could be the death of you

It is unfortunate that super funds and financial planners spend far more time considering investment risk than mortality risk. In future, retirement savings must last much longer, and a study of mortality risk shows how long.

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