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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: WSJ: Longevity Insurance Date: 9/2/2010 2:26 PM
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Wall Street Journal today has article on Saving for Retirement (on page C9)--

http://online.wsj.com/article/SB1000142405274870491330457537...

After a discussion of immediate annuities they launch into a few new concepts as follows--

Longevity Insurance: These are like immediate annuities, but your money is invested for a period of time before a predetermined payout date. In an example from MetLife, a 65 yo male invests $50K and can collect $1000/mo beginning at age 75 or $1580 if he waits to age 80. As with immediate annuities, provision can allow surviving spouse to collect but payout is reduced or you can have a guaranteed payout period for reduced payout. If you die before you begin collecting payments, investment plus interest is refunded to your estate.

Managed Payout Funds: Mutual fund companies including Vanguard, Fidelity and Charles Schwab offer these mutual funds which are designed to self liquidate at a specified date. Hence, you receive regular payments consisting of investment earnings plus a refund of part of your investment. Vanguard has three such funds. Payout varies with investment performance and share value.
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