“If you survive your pension savings, you will be poor! If your savings survive you, that’s equally inefficient.”
The retirement planning dilemma
Retirement income is expensive to fund – and it just got worse…
Financial planning for retirement is one of the toughest problems to solve - and it just got worse: interest rates are at record lows and life annuities have become prohibitively expensive.
Guaranteed annuities insure against longevity risk. But guarantees are costly, and higher costs means lower income.
Income from your investment portfolio? How long is your planning horizon?
Standard investments offer no longevity protection whatsoever. Relying on them for lifetime income is both risky and inefficient. Here’s why. Statistically, new retirees might each expect to live for 20 to 25 more years, on average. But they might live much longer, perhaps as long as 40 or 50 years! To guard against longevity, they must either work and save longer or spend frugally early in retirement. Either way means that they must sacrifice some of their hopes and dreams.
What are Fair Modern Tontines?
Modern Tontines represent a community-based financial plan. Investors take a portion of their savings and join a tontine pool with thousands of others. The community protects its members by banding them together to share and diversify their longevity risk. This risk pooling allows the tontine to provide the assurance of lifetime income, which in turn gives greater peace of mind and makes estate planning easier.
Like regular investments, members receive investment returns. What’s different is that members also receive “longevity credits” from the pool, which represent a portion of deceased members’ accounts, and which grow significantly the longer you live.
What are Modern Tontines advantages?
Community Based: Minimal maintenance fee
The Fair Modern Tontines are community based: the longevity risk of each member is pooled. There is no expensive guarantee to be maintained. The costs are minimal and serve only to maintain the platform.
Transparent and Fair
The Fair Modern Tontines are engineered to be transparent and fair by construction. The money is invested in selected funds at your discretion and at all times, you know exactly the value of your account and your share of the pool. No surprises here.
Always Fully Funded
Unlike traditional pensions, your Modern Tontine account is always kept in 100% fully funded status by harmonizing your payouts with your investment returns and the longevity experience of the community. Payouts can adjust both upward and downward over time to ensure that they will be sustainable for the rest of your life.
Flexible and Customizable
Oh, and did we mention that Modern Tontines are also flexible and customizable to fit your personal needs? Options are available such a joint-life option to include your spouse, top-up capabilities, personalized asset allocation, the ability to select the date at which payouts begin, the rate at which you wish them to grow, etc. Those with a desire for income stability may combine a Modern Tontine account with a regular investment account that can be tapped into on occasion.