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Worried About Your Parents Running Out of Cash in Retirement? MassMutual Has You Covered

Did you know that one out of every three 65-year-olds today will live past the age of 90? As life expectancy continues to rise, individuals are faced with not only the issue of funding their own (potential) 30-year retirement, but also that of their parents. In response to this conundrum, MassMutual has announced a new product that Boomers can purchase to assist their parents avoid the risk of running out of money in retirement.

According to a recent article from 401(k) Specialist magazine, AgeUp was designed to provide financial protection for the adult children of the Boomer generation. Developed by Haven Life Insurance Agency, MassMutual’s in-house direct-to-consumer startup, AgeUp is issued by MassMutual.

“Traditional life insurance protects people from the financial strain of loved ones dying sooner than expected. Age Up is the opposite: It protects people from the financial strain of helping support a loved one who outlives his or her resources,” said Blair Baldwin, General Manager for the AgeUp product. 

Believed by its creators to be the first-of-its-kind, the annuity product provides an overlooked customer base with a solution to the retirement funds gap.

“More and more people are living into their 90s and beyond and there hasn’t been a financial product specifically designed to address the problem of adult children supporting their aging parents until now,” Baldwin added. “We set out to create a solution to help everyday Americans address this growing need, and found we could achieve this goal by creating a new kind of deferred income annuity.”

AgeUp was apparently born after MassMutual conducted an internal study with hundreds of potential customers, including many Millennials and Gen Xers. The findings were:

  • 71% believe at least one parent or in-law will live longer than average 
  • 57% have a relative who lived to age 95 or beyond
  • 64% expect to financially support their parents or in-laws in their old age
  • 35% think their parents will run out of money between the age of 90 and 100

Developers claim that the new product is different from all other annuities on today’s market in four major ways:

  1. AgeUp is designed for financial protection for life after 90, and as such, is the only annuity that converts into an income stream for life beginning at age 91 or later. Age 85 is typically the oldest annuitization age for other products. 
  2. AgeUp is the first annuity to be accessible to almost everyone, despite income. There is no upfront contribution required and monthly premiums starting a low as $25. 
  3. AgeUp is the only annuity designed specifically for the intergenerational use of adult children supporting aging parents. 
  4. Adult children pay the monthly premiums for AgeUp and receive the monthly payouts once the parent reaches the trigger age. 

AgeUp has been approved for sale in 44 states, Washington, D.C. and Puerto Rico. In 2020, Baby Boomers in their early 60s and 70s will be able to purchase the annuity directly. More more information, visit www.age-up.com.

Written by Rachel Summit

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