Personal Finance / Pensions
August 07, 2014
"The Financial Risk of Living a Long Time "
Research Finding :
People nearing the end of their careers can potentially lose 5% to 10% of their retirement wealth, or the equivalent of 2 to 5 years’ salaries , by failing to annuitize their savings ( opting for pension ) or annuitizing too early By providing a guaranteed income for life .
Basically , an annuity is essentially an insurance policy against outliving one’s retirement savings. In a study, researchers found that when stocks are rising, people are less likely to purchase annuities offered by their employers.
SOURCE: Stock market returns and annuitization & Research Alessandro Previtero of Ivey Business School in Canada.
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