It’s sleazy, it’s totally illegal, and yet it could become the future of retirement - The Washington Post:
Tontine -- a retirement vehicle where a group of people invests a sum of money something like a mutual fund at a payout based on performance, BUT with the twist that as people die, the remaining folks get their payments. It is much like an annuity where if you die the day after you put your money in, your fellow investors get the money over time, rather than the annuity provider getting it.
Turns out the tontine -- named after its inventor was once a very popular retirement vehicle, then, due to some scandals and people considering them a "morbid gamble", it was outlawed.
I can't see any reason at all they ought not be offered. Sleazy? We have reverse mortgages, payday loans and the biggest ponzi scheme of all, FICA, these seem like just another reasonable hedge.
I always expect to die tomorrow, so not very good for me, but OTOH, I expect my wife to live forever, so PERFECT for her!
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