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The 401(k) was designed in 1978. The world it was built for no longer exists. Back then, retirement lasted a decade. Today, it can last three.
According to the Actuaries Longevity Illustrator, a joint planning tool built by the American Academy of Actuaries and the Society of Actuaries using Social Security Administration mortality data, a married couple retiring at 65 today has a substantial chance that at least one spouse will live past 90. According to Goldman Sachs' 2025 Retirement Survey and Insights Report, 58% of workers believe they will outlive their savings. Yet most mainstream retirement tools, including the 401(k) and the IRA, were built around a retirement that lasted 10 to 15 years. For a generation routinely living 25 to 30 years past retirement, that gap is where financial security can quietly disappear.
As we've covered before, this retirement gap is reshaping workforces and HR strategies in ways most organizations aren't prepared for. Longevity-linked securities were built specifically to close it.
TL;DR: A longevity-linked security (LLS) is an SEC-registered investment that pays out at specific ages and has two sources of return: the performance of its underlying market investments, and a longevity bonus funded by investors who exit the fund early. The longer you stay invested, the more of that bonus can accumulate. Savvly offers a longevity-linked security registered with the SEC.
A longevity-linked security (LLS) is an SEC-registered investment that is designed to pay out at specific ages and has two sources of return: the performance of its underlying market investments, and a longevity bonus funded by investors who exit the fund early.
The first is market performance. An investor's money is placed in S&P 500 index ETFs and tracks the market.
The second is the longevity bonus, funded by investors who exit the fund early, whether voluntarily or upon death. The value they leave behind is reallocated to investors who remain. The longer you stay invested, the more of that bonus you can accumulate.
The mechanism behind the longevity bonus is one of the oldest ideas in finance: risk pooling. It's easier to understand with an illustrative and hypothetical example.
Imagine ten friends each put $100 into a shared pot for a group dinner one year from now, $1,000 total. The rule: only the people who show up split the pot. A year later, three can't make it. Seven arrive. The $1,000 is now divided among seven instead of ten. Each person who showed up receives about $143 on their original $100, $43 more than they put in.
That extra $43 didn't come from the pot growing. It came from the group agreeing in advance that the shares of those who don't reach the finish line go to those who do.
Replace "showing up to dinner" with "still being invested at milestone ages," and you have the longevity bonus. Every investor in the fund is doing exactly the same thing: investing their own money and hoping to live a long, healthy life. When someone exits early, their accumulated gains flow to the investors who remain. No one is rooting against anyone else. It's cooperation, not competition, and a longer life is precisely what earns the reward.
The very thing most people fear about getting older, outliving their money, is precisely what earns the reward here. A longer life can stop being a financial risk and can start being a financial advantage.
The mechanism is centuries old. Risk pooling underlies pensions and insurance alike. So why wasn't it available as a standard registered investment until now?
The answer is regulatory. U.S. investment fund rules were written decades ago and didn't accommodate a product whose returns depend on which investors are still active. The mechanism survived mainly inside pensions, endowments, and insurance products, each with their own costs and gatekeepers.
In April 2026, the SEC granted Savvly an exemptive order, allowing a registered fund to allocate returns based on each investor's age.
Savvly's longevity-linked security is structured around four milestone ages: 80, 85, 90, and 95. These are the years when traditional retirement savings are most likely to be running low.
Payouts are staggered by design. Rather than a single distribution, investors receive payouts spaced across the later decades of life. The later milestones can be the largest in dollar terms, because those portions have been compounding the longest and accumulating the most longevity bonus.
The size of each payout depends on market performance, how long the investor has been in the fund, and the composition of the fund's investor base over time. Payouts are potential outcomes, not guarantees. Investors who need to exit early receive a portion of their original investment back under the fund's exit terms. For full details on payout mechanics, fees, assumptions, and risks, visit savvly.com/disclosures.
The comparison to annuities and life insurance comes up often. The differences are significant.
An annuity is an insurance contract. They often convert savings into a fixed income stream, typically at a high cost, with no market upside. A longevity-linked security is a capital markets investment registered with the SEC, invested in low-cost index ETFs, with no insurance company, no carrier, and no insurance license required to recommend it.
A longevity-linked security participates in market performance. Investors benefit from market returns alongside the longevity bonus. A traditional fixed annuity offers neither.
What is a longevity-linked security in simple terms?
A longevity-linked security is an SEC-registered investment that pays out at specific ages and has two sources of return: the performance of its underlying market investments, and a longevity bonus funded by investors who exit the fund early. The longer you stay invested, the more of that bonus you can accumulate.
Is a longevity-linked security the same as insurance?
No. A longevity-linked security is a registered capital markets investment, not an insurance product. There is no insurance company involved, no premium, and no insurance license required to recommend it. The longevity bonus is a fund mechanism, not an insurance benefit, and payouts are not guaranteed.
What happens if I need to withdraw early?
Investors who exit before reaching a milestone age receive a portion of their original investment back under the fund's exit terms. Gains are not returned on early exit. Full details on withdrawal terms are available in the fund prospectus at savvly.com/disclosures.
Are the payouts guaranteed?
No. Payouts at ages 80, 85, 90, and 95 are potential outcomes, not guarantees. Actual amounts depend on S&P 500 market performance, early withdrawal activity in the fund, contribution amounts and timing, and other factors. Savvly is not an insurance product and does not guarantee any specific income or return. Investment involves risk, including possible loss of principal.
Who is a longevity-linked security designed for?
A longevity-linked security is designed for anyone who wants to address the risk of outliving their savings, particularly working adults in their 30s through 60s.
How is a longevity-linked security different from a 401(k)?
A 401(k) is a wealth accumulation tool designed to be drawn down through retirement. A longevity-linked security targets specifically the years most 401(k)s run thin: ages 80 and beyond. The two work alongside each other. Learn more about how longevity benefits complement existing retirement strategies, or read what a longevity benefit is and how it differs from an annuity.
Longevity-linked securities are a genuinely new category. Not a variation on an existing product. A different structure with a different engine. Think of it as the ETF for longevity: a registered, transparent, market-linked investment that turns a longer life from a financial risk into a financial reward.
For decades, the mechanism that makes this possible was locked inside pensions, endowments, and insurance products, inaccessible to most everyday investors. That changed in 2026. The category is now open.
Use Savvly's estimator to see what a longevity-linked investment could look like for you, or speak with our team to learn more.
The Savvly Longevity Benefit is designed to deliver scheduled income at later-life milestones for investors who reach them. It adds a longevity-based reallocation layer to market-linked performance, creating the opportunity for potential cash payouts at ages 80, 85, 90, and 95 for investors who reach those milestones. Savvly is not insurance and not FDIC insured; payout amounts are not guaranteed. For full details on fees, assumptions, risks, eligibility, and disclosures, visit savvly.com/disclosures.
This article is for informational purposes only and does not constitute financial, tax, or investment advice. Consult a qualified financial professional before making retirement planning decisions.
Disclosures
The information on this page is provided for educational purposes only and is not intended as investment, legal, or tax advice. It is designed solely to illustrate how longevity-linked investment benefits may work under certain assumptions. Actual results will vary. All illustrations, examples, and case studies are hypothetical and are intended to demonstrate potential scenarios — not to predict or guarantee actual outcomes. They do not represent the performance of any individual investor, portfolio, or account.
Key Assumptions Used in the Illustrations
Life expectancy and mortality projections are based on the most recent Social Security Administration (SSA) tables available at the time of simulation.
In the event of death or early withdrawal, hypothetical scenarios assume that investors who exit early, or their estate in the event of death, may receive 75% of the lesser of the initial investment or current market value, plus 1% for each full year the account was active. Case studies assume standardized market growth of 8% annually and do not incorporate unexpected market volatility, inflation, changes in interest rates, or changes in an investor's personal circumstances.
Simulations may assume a 3% annual early withdrawal rate prior to payout or death. All figures shown are net of fees. No forecast, projection, or hypothetical return should be relied upon as a promise or representation of future performance.
Past performance is not indicative of future results. The 8% annual market growth rate used in illustrations is a standardized assumption for modeling purposes only and does not represent the historical or expected performance of any specific investment. Note that early or voluntary withdrawals by other participants can affect fund performance and the size of distributions, and that a higher-than-expected number of participants reaching payout milestones may reduce the per-participant benefit received.
Savvly's Longevity Benefit is not a bank product, not FDIC insured, not insured by any federal government agency, and not insurance; payout amounts are not guaranteed. Investment values may decline..
Savvly's Longevity Benefit may not be suitable for all investors. Eligibility to invest is subject to qualification requirements and not all investors will be eligible. Investors should carefully consider their investment objectives, risk tolerance, time horizon, and financial situation before investing. See savvly.com/disclosures for current eligibility criteria, fees, risks, withdrawal terms, and fund assumptions.
This content is published by Savvly, Inc. Savvly has a financial interest in the products described and this content should not be interpreted as independent financial research or analysis. Investors should carefully evaluate their own circumstances and consult a qualified financial professional before making any investment decision.
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