Longevity Risk

{2 minutes to read}  As many of our clients are getting closer and closer to retirement, they are faced with many different types of risk. One risk is market volatility — where we constantly see wide ranges of performance in the stock market: markets going up and going down every single day by wide, wide margins. That has a lot of people scared.

On top of that, we are in a very low-interest-rate environment. Those safe pools of money such as bonds, bank accounts, and CDs have very low yields and are earning very low interest.

Then there is longevity risk. More and more people are living longer and therefore, have more exposure to healthcare expenses during retirement; not just the cost of insurance, Medicare, Medigap and all the different types of insurances that we need (such as long-term care insurance, etc.) but longevity risk brings in the other risks more often. In other words, the longer you live, the more you will be exposed to market fluctuation, interest rate risk, and healthcare expenses.

One very interesting point that is sometimes not considered or understood by many people, is that living to 100 might actually cause an increase in taxes. Why? Because life insurance policies that were issued some time ago may actually mature, and when they mature, the insurance company will send a 1099 for any profits that you earn when the insurance ends. There are some solutions for avoiding that tax, but it requires being aware of what’s going on with the policies — whether they will endow or not.

So, when it comes to retirement planning, let us know how we can help you so that you can avoid some of the risks during that period of time from 65 (or whenever you retire) on. Whether that’s creating an investment plan that protects you against market volatility and interest rate risk, healthcare costs and long-term care, and/or providing protection against estate taxes or income taxes on life insurance policies that can mature at age 100, we can provide you with the information that you need. 

Give us a call. Let us know how we can be of help to you. And give us some feedback on our blog. We’d love to hear from you.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS.  Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.

This material is for informational purposes only. Neither APFS nor its Representatives provide tax, legal or accounting advice. Please consult your own tax, legal or accounting professional before making any decisions. American Portfolios Financial Services, Inc.(APFS) and American Portfolios Advisors, Inc.(APA) are not affiliated with any other named business entities mentioned.