Thursday, October 01, 2015

How to Prosper by Living Long: the Tontine

You and a lot of others each invest a set amount in a pooled fund.  The fund pays out, say, 4 percent a year, equally divided among you and your fellow investors. As other investors die off, your payments rise. By the time half have died off, your payment should double. And if you live long enough….

The tontine "might be the iPhone of retirement products,” says Moshe Milevsky, an associate professor of finance at York University in Toronto. Is he on to something?

Earlier post: Bring Back the Tontine.

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