Americans are living longer and that's created a big worry among many baby boomers and retirees that they'll outlive their money. Though the average life expectancy for a 65-year-old today is 84 (for men) or 86 (for women,) one out of every four 65-year-olds will live past the age of 90 and one out of 10 will live past age 95, according to the Social Security Administration.
With the possibility of spending two decades or more in retirement, traditional investment strategies—such as overweighting a retirement portfolio with bonds and other fixed income assets and decreasing exposure to stocks—may not do much to help make your money last, some financial experts say.
Interest rates are near historic lows, while bond yields are abysmal. So-called safe investments, including CDs and money market funds, have minuscule returns. So some investors are considering less conventional retirement strategies to make sure they don't deplete their nest eggs.
If you're too conservative with your investments, your money may not last as long as you'll need it, said Barry Gillman, research director at the Brandes Institute. "The answer now is you look to the equity markets where potentially you have much higher returns over the long term, but with equities, you have more risk. There is no doubt about that."
Gillman says longevity insurance is one way to reduce that risk.