Here are just a few of the posts that caught my eye this week. What do you think about them?
Just like “dying too soon” and “get hurt and can’t work” are actuarial risks that individuals can’t protect against on their own, so too is “living too long.”
Instead these are risks that can be handed off to insurance companies in the form of life insurance, disability insurance and longevity insurance.
Unfortunately, because of the lack of a broad market for longevity insurance, there isn’t as sophisticated a market for fairly pricing the different levels of risk for the target markets identified in the article. That’s a very necessary development.
While we’re talking about retirement ages, let’s talk about another one – it’s the age at which your retirement is on auto-pilot and not dependent on your advisor (who retired a few years back) or your kids/grandkids to manage for you. And it’s definitely not dependent on what the Dow Jones does or does not do. It’s what we call the “no worry age,” which could be 65, 75 or even 85. It’s the age when your basic living expenses are met by guaranteed lifetime income from sources you trust.
I agree with the ideas of auto-enrollment and expressing your 401(k) balances in terms of the retirement income they can produce.
However, they miss one of the key decisions that is confusing and the most challenging… What do I do with that savings balance when I retire?
I’m a strong believer that there should be a default option that provides the average new retiree with both security and some potential for income growth.