Definition of Longevity Risk

Financial Terms Beginning with L

What is Longevity Risk

Longevity risk is the risk or probability of outliving your financial resources or savings. This risk is particularly relevant for people who are retired or are nearing retirement.

There is a chance that life expectancies and actual survival rates exceed expectations, which results in a greater-than-expected cash flow need from investments or retirement accounts.

Glossary of Terms and Phrases

A financial dictionary or glossary is an essential tool to better understand the meaning of a specialized term or phrase. It would obviously make life much easier if everyone spoke the same language and used the same financial terms and phrases but that is not realistic.

We learn new languages to communicate with each other, transact business globally and to appreciate other cultures. Global finance is a specialized language that if understood and mastered, it will provide benefits that help to decrease risk and improve investment returns. Financial literacy is the foundation of developing good investment strategies and sound decision making.

Related Investment Terms

Credit Risk

Horizon Risk

Inflation Risk

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