Northwestern Mutual announced the launch of their Portfolio Immediate Income Annuity this week. The product was developed in response to pre-retirees desire for predictable income in an age where employer-sponsored pension plans have fallen by the wayside.
The Portfolio Immediate Income Annuity also addresses another issue for retirees and pre-retirees: Longevity risk. Recent data has shown that a 65-year-old man has a 50 percent chance of reaching 87 while a 65-year-old woman has a 50 percent chance of reaching 90. Northwestern Mutual hopes the product will be blended into retirement portfolios in order to alleviate the risk of outliving one’s money.