America isn't ready for longer lifespans

The Annuity Man

Check out this interesting article from Yahoo that The Annuity Man thinks is worth your reading time.

Please click the link above and read the article, because it's a good one.

Below is my synopsis of how longer lifespans and longer life expectancy affect annuities. 

People are living longer.  That's a fact.  Life expectancy tables continue to change, which affect annuity payments in a negative way.  The longer your life expectancy, the more projected payments, which means the payments will be lower.  Always remember that annuity companies have the big buildings for a reason...they know when we are going to die and they price their guarantees to reflect those life expectancy tables.  In contrast, property and casualty companies are always in financial trouble because they don't know when a hurricane is going to hit or when a fire is going to happen.

Annuities are the only product that provides a lifetime income stream, regardless of how long you live.  There's no ROI (Return on Investment calculation) until you die.  Cute rhyme, but the truth.  Annuities contractually solve for "longevity risk"...which is the fear of outliving your money.  You are transferring the risk to the annuity company to be on the hook to pay you for the rest of your life.  If you set the contractual payment up for you and your spouse, that guarantee will cover both lives, regardless of how long you live.  When the first spouse dies, the income continues uninterrupted and unchanged for the surviving spouse/partner's life.

Annuities are contracts and transfer of risk strategies that primarily solve for lifetime income and principal protection.

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