FAQs

What is longevity risk?

Longevity risk refers to the possibility of outliving your financial resources in retirement due to living longer than expected.

What is mortality risk?

Mortality risk is the risk of one spouse passing away earlier than expected, leading to a reduction or loss of certain income sources for the surviving spouse.

How can advisors help manage longevity and mortality risks?

Advisors can use a rigorous process to calculate spending capacity based on mortality-adjusted cashflows, consider factors that influence longevity and mortality risks, and regularly update and adjust retirement plans accordingly.

Conclusion

Planning for retirement involves not only considering how long you will live but also how potential changes in income sources due to mortality risk can impact your financial situation. By working with an advisor to manage both longevity and mortality risks, you can develop a comprehensive strategy that addresses these factors and helps ensure a secure and comfortable retirement. Regularly reviewing and adjusting your plan based on actuarial tools and updated information can help you navigate the uncertainties of retirement with confidence.