While we may all be excited at the prospect of living a longer life, insurance companies and others selling immediate annuities have to worry about increasing life expectancies. The Hargreaves Lansdown article “Live long and prosper” by Ruth Richards discusses the effects of increasing life expectancies on annuity products. While many people around the world make New Years resolutions to lose weight, get their finances under control, or get organized, insurance companies make somewhat of a resolution as well. At the beginning of each year they have to reevaluate their annuities and determine if any changes need to be made.
They will look at mortality rates and any increases in life expectancy predictions so that they can adjust their product offerings accordingly. As people live longer, insurance companies will make more payments to those holding annuities. Fixed annuity rates and other offerings may be reduced to keep up with the demand of making payments to those already holding annuity products. While those selling annuities are reevaluating in the New Year, it is also a great time for investors to reevaluate as well. Make sure that your own finances are in order so that you can retire and live comfortably when the time comes. An annuity offers lifetime payments so the longer you live, the longer you receive your payments. Now may be the time to make a 401k annuity transfer and use that money to pay your basic living expenses over your lifetime.
