Jay Winestein discusses how Life Expectancy (LE) Credits can help sustain retirement income.
Listen to the interview on the Business Innovators Radio Network:
Large-scale pensions rely on the idea of how long individuals live in large groups.
Life Expectancy (LE) credits are a crucial part of this large group actuarial concept that can add significant value to an individual’s retirement income.
To simplify a sophisticated idea, in a large group of 100,000 individuals, some will live to total life expectancy or beyond, and some will fall short. The LE credit can increase the payout factor or percentage that an individual can receive for income, regardless of the rate of return in the pension. This creates a windfall of assets that can be used to support those living longer.
Jay explained: The LE credit is available to anyone who understands the concept of life expectancy and can be employed in retirement to protect against running out of money in later years.