As retirees live longer, financial advisers will increasingly need to help their clients understand the financial side of “longevity fitness.” Last year, a study by the National Council on Aging found that the poorest 20% of older adults died an average of nine years sooner than the richest 10%, and as income levels grew, mortality rates declined. Affluent seniors with higher standards of living therefore risk stretching their life savings beyond their limits, experts say.
Scott Colangelo, chairman of and managing partner in Prime Capital Financial—part of the consortium behind Income America’s 5ForLife retirement product, which has a collective investment trust for employer-provided retirement plans that also offers GLWBs through contracts with multiple third-party insurers—passionately argues that income products need to be tied to the market to outpace inflation.
“Say you’re going to be retired for 30 years. Do you think your money is going to be better off in a blend of stocks and bonds, or do you think it’d be better in a money market-type account?” Colangelo asks.
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