Podcast Center
Video Center
Webcasts
Resource Center
Events
By 
December 12, 2022 at 05:31 PM
What You Need to Know
- The product is meant to provide a windfall for investors later in life.
- Payouts can be made at age 70 or later for men, 75 or later for women.
- Funds are invested in an S&P 500 ETF.
Savvly, a new financial services company in Boulder, Colorado, has launched a private placement investment pool for retirement — an alternative investment product designed to manage longevity risk.
While the product sounds similar to a tontine, Savvly’s leader said it’s different.
Participants allocate a small portion of their investment portfolio — 5% to 10% max — into the Savvly investment pool, a limited partnership. An SEC-regulated, independent custodian holds the funds, which are invested in Vanguard’s S&P 500 ETF (VOO); the company plans to add more options soon.
Savvly says the pooling effect, paired with market returns, is designed to create a substantial later-life windfall for investors. The company or participants choose the payout ages, with the earliest payout date for men set at 70 and for women at 75.
When a Savvly investor reaches their payout date, their account gets access to an amount equal to the index fund’s value for their account — plus their share of the longevity pool created from the forfeitures of investors who leave Savvly before their own payouts, either by withdrawing early or dying.
Account holders who pass away or withdraw from a fund prior to their payout date will receive a payout smaller than the original investment. For the first two years, investors can join Savvly and change their mind with no early withdrawal penalties.
“Our new retirement focused platform utilizes the same risk-pooling concept behind most annuities, pension plans and Social Security, but adds the returns of the stock market and the tax efficiency of a limited partnership. We have adapted this concept so accredited investors and their financial advisers can take advantage of its features as part of their retirement planning and estate management,” co-founder and CEO Dario Fusato said in a recent statement.
“There are roughly 13.7 million accredited households in the U.S., which is equal to almost 10.7 percent of all households. As this number is expected to grow in the coming years, we want Savvly to be an efficient financial option for this population.”
