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When we became parents, I ran out and bought life insurance.  It was the only way I could ensure that the job of financially protecting my family would be completed if I wasn’t here to do it myself.

Now that the kids are out of college and my financial fear has turned to what happens if I live too long?  Actuaries describe this as transitioning from “mortality” risk – to “longevity” risk.  Here’s what else we know:

  • Life Expectancy at Birth                78.7 Years
  • Life Expectancy at 65                    81.4 Years
  • Life Expectancy at 75                    87.1 Years

So at 65, I can statistically expect to live another 16.4 years.  By 75 – I should only have 6.4 years to go.  But I don’t.  At 75 – I have 12.1 yet to go – and that figure goes up every year I survive to my next birthday.

And these aren’t static numbers.  They go up as medical science extends life expectancy – and medical doesn’t come cheap.  I might start buying less surfboard wax at 75 – but I’ll probably be spending more on medical care – a lot more.

Because its’ impossible to know how long our money will need to last, at least some of it needs to be in an account that will never run out.  And there’s only one thing in the world that will guarantee we can’t outlive our money – an annuity.

Just as I couldn’t imagine having kids without life insurance, I can’t imagine retirement without longevity insurance – so I’m taking a new look at annuities.  How are you ensuring your longevity?