Bond yields continued to go up in early December, which has caused annuity payouts to go up again. Based on the fact that yields have declined over the last couple weeks, we expect annuity payouts will more likely than not decline or stay the same when carriers next update their models. It varies from insurer to insurer, but there’s typically a couple weeks to as much as a month of lag between when bond prices change and when they’re reflected in annuity pricing.
Here goes nothing: let’s spend some time talking about dying. But not in a morbid or pessimistic way. There are incredible new developments in how we think about aging and end-of-life care.
A word of advice: don’t use your retirement portfolio to predict the future. This month provided a case study as to why. Better to keep contributing to your retirement and stay invested through rain and shine. And that includes through changes in who is running the country. Not only were the vast majority of predictions about who would win the presidency incorrect, so too was the conventional wisdom about the impact of the election on financial markets. We dig in below about the difficulty and folly of predicting the future.
Big changes are happening with public sector pensions, and hardly anyone is taking notice. The latest shoe to drop in a decades-long shift away from pensions and towards what’s called a defined contribution system comes from the US military. They’re moving away from a traditional pension plan and towards a 401(k)-like plan in the coming months. The tie-in to longevity? With a pension, you don’t have to guess how long you’ll live in order to budget for retirement. In a defined contribution system, you do.
Does buying an income annuity with an inflation rider make sense? And if so, what kind of rider is best? The short answer: inflation is a significant risk, but you’re probably better able to protect against it with other assets in your portfolio than you are with an inflation rider on your income annuity.
You’ve probably heard the urban legend about the woman who is 105 years old and swears the secret to her longevity is a martini a day. You’ve also probably read the reason the French are healthier is because they drink a glass of wine everyday. Of course, you’ve also heard alcohol can have a negative impact on your health, too (most especially if you drink and drive). Most of us want to live as healthy a life for as long as possible. When it comes to the fountain of longevity, the question remains: to drink or not to drink?
If you have a family history of long-living relatives then you probably feel lucky to have such good genes. But is there any truth to the idea that your relatives’ longevity is related to your own? We took a look at a number of studies and prominent researchers’ work to get to the bottom of anchoring and longevity.