By Pascale Hansen

As a business owner, you are likely aware of the various risks that can impact your company's bottom line. One such risk that may not be top of mind, yet is increasingly important to consider, is longevity risk.

Longevity risk refers to the possibility of outliving your financial resources, particularly in retirement. With people living longer than ever before, this risk is becoming more prevalent and can have significant implications for businesses, especially those with pension obligations.

Mitigating longevity risk requires careful planning and consideration of various strategies. One common approach is to diversify your investment portfolio to include assets that are less sensitive to changes in interest rates and inflation. This can help protect against unforeseen increases in life expectancy that could affect the funding of pension plans.

Another strategy to mitigate longevity risk is to explore purchasing annuities or other insurance products that provide guaranteed income for life. These tools can help shield you from the risk of outliving your savings by ensuring a steady stream of income regardless of how long you live.

It is also essential for business owners to regularly review and assess their retirement plans to ensure they are adequately prepared for the potential impacts of longevity risk by getting a comprehensive strategy tailored to your unique situation.

If you have any questions or need further guidance on how to mitigate longevity risk for your business, please feel free to reach out. Your financial future is important, and I'm here to help you navigate these challenges effectively.

Pascale Hansen is the Founder, CEO, and Financial Strategist at Zada.

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