Good, short read on longevity insurance

[Big_Hitter]

Money on Seahawks or Patriots? No, I Just Bet I’ll Live to 80 - Total Return - WSJ

 

[donheff]

Basically, it is a guy making a choice to buy a deferred annuity. He spends $5K at age 47 to get $2.6K/yr starting age 80. The unstated assumption (I think) is that he sees the risk of the insurance companies failing as less than the risk of his own alternative investment failing. Not a compelling argument to me. The $5K bet is sort of academic - how much would it help in any event? If you substitute $5K with $100K at age 47 it is more meaningful but I am betting most would go with the self insurance.

 

[Big_Hitter]

I think it would help a lot - this of this like a QLAC in a 401k plan - it's a hedge against outliving your assets

 

[haha]

Excellent article by a well known proponent of longevity insurance. To me, if one is interested in longevity insurance, by far the first thing to ask is can I finance myself to age 70 before drawing my SS? (Ignoring fancy footwork for marrieds, older parents with you children etc.)

Waiting until 70 for SS dominates any commercial longevity product.

Ha

 

[Big_Hitter]

Waiting until 70 for SS dominates any commercial longevity product.

Ha

depends on your age (and desired retirement income level) - by the time I'm 70 the fund is projected to pay benefits at 72% (or less) sans legislative action

Social Security Trust Fund Runs Dry In 2029, CBO Signals - Investors.com

 

[haha]

For sure.


Sent from my iPhone using Early Retirement Forum

 

[LARS]

Perhaps I am foolish, but I am not particularly worried about a haircut to SS. The fixes are relatively easy. Bigger concern is Medicare. I'm hoping my SS will cover increased Medicare expense!

 

[Independent]

depends on your age (and desired retirement income level) - by the time I'm 70 the fund is projected to pay benefits at 72% (or less) sans legislative action

Social Security Trust Fund Runs Dry In 2029, CBO Signals - Investors.com

Fortunately, we don't need to start making this decision until we are 62. And then, we can review it each year and bail if we think the situation has changed.

I think about it every year. But, at age 67, I'm still deferring.

 

[Independent]

I thought the last paragraph was a good point. It addresses the "don't buy an SPIA today because rates may go up" idea.