The retirement crisis, in a nutshell, is that the majority of people have not saved enough for a period of life that is expanding (and thus more expensive) as a result of increased longevity.
The variability of investment returns (and, indeed, of longevity itself) is another factor in this crisis since people generally require a steady income, while retirement portfolios' constant zig-zagging makes it well-nigh impossible to bring financial order to one's "golden years."
I have many times highlighted this seemingly intractable problem, and on far fewer occasions noted a potential solution in the hoped-for commercialization of tontines, an idea promoted by York University Professor Moshe Milevsky, who authored a book on the subject.
Tontines, a once common annuity-style investment, pool subscribers' longevity risk in an investment that increases its payout to members who survive the death of their peers within the group (since the fewer people in the pool, the more the annuity can pay).
A new article on the topic in the very establishment publication "The Economist" encourages me to expect the mainstreaming of this product (once, of course, it is finally developed). The British weekly cites Milevsky quipping that some "22-year-old kid in Silicon Valley" will eventually produce the disruption, and noting besides that the number of tontine-related patent applications has recently increased.
Being firmly of the view that the cure already exists before the malady has been diagnosed, I can't see this solution (or something like it) not making a comeback since the need is so dire, and thus failure to find a solution will have depressing economic effects across society.
To my mind, the tontine king of the future will be the Henry Ford of finance. Just as Ford's $5 a day factory jobs (much higher than the then-prevailing wage) created a middle-class market for cars, tontines' efficiency will prevent a massive
