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The Downside of Living Longer

October 12, 2015

Normally longevity is good thing. Everyone wants to live a long life, right? Of course.

But in the eyes of an actuary, longevity has a different meaning. The Society of Actuaries recently updated its mortality tables to reflect our increased life expectancies. 


For men, that’s a 2.4% increase in life expectancy since 2000. For women, it’s a 2.8% increase.

The ripple effects of this increase are immense and will affect several products, including annuities and insurance policies. In the near future, I think you’ll see a lot of companies change the way they do business.


Annuity providers will probably drop guaranteed payouts, income riders and other features on new contracts because of longer lifespans. The updated tables will also require insurance companies to adjust payouts to properly reflect people living longer. 


There are three big retirement threats to be mindful of, and how long you live plays a role in all of them. The risks are longevity risk (outliving your money), sequence risk (taking big hits on your portfolio early in retirement) and stupidity risk (making bad decisions, especially in tough times).


Guaranteed income, like a fixed index annuity, is one of the best ways to effectively mitigate all three risks. But that landscape is about to change. Around the new year, annuity providers will probably make big changes like the ones mentioned above.


So if you want guaranteed income before the updated actuarial tables play a role, get them while supplies last!

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This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.

Andrew Wood, Dan Simon and Alison Slezak are Investment Advisor Representatives. Advisory services are offered through CoreCap Advisors, LLC., a Registered Investment Advisor. CoreCap Advisors, LLC and Daniel A. White & Associates, LLC are separate & unaffiliated entities. 

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