It’s sleazy, it’s totally illegal, and yet it could become the future of retirement - Tontines.

Tontines, you see, operate on a morbid principle: You buy into a tontine alongside many other investors. The entire group is paid at regular intervals. The key twist: As your fellow investors die, their share of the payout gets redistributed to the remaining survivors.

My dad had a novel called The Tontines.

always thought it was a family or something.

so glad to read this - sounds interesting. Is it a form or annuity or something?

annuities were the backbone of savings in this country long before the stock market came into existence, so I have been told.

Okay, so if you paid a king 100 pounds, he might promise to pay it all back to you with interest over the course of a dozen years — that would be a bond. Or the king might make small annual payments to you and descendants for the rest of eternity — that would be a perpetuity. Or the king might make you slightly larger annual payments until you died — that would be an annuity.

Yet tontines.. totally different. It's almost all 3 into one.

interesting, thanks

I'd be willing to do one :)

What happens when you're in one with a serial killer wander he murders every other member?

So if you kill off everyone else you get their cut?

Ok, I see a plan coming together.

Why is it illegal?

First you let him do his work.
And be very vigilant.
Then rat him off or kill him when he gets close to you.

How is this sleazy and illegal? because wall street and the gov doesn't get a big cut?

Putting a price on your head with people you know doesn't sound like the greatest idea ever.

Exactly!

I'm sure it could be setup where people are semi-anonymous to each other. This sounds like propaganda probably from wall-street or other interested parties.

Let's say me, The Comedian, GFG, Trinity, Bodiless, NODOOM go into a Tontine. We each put in $10K.

We equally split the annuity - and everytime someone dies, the remaining members of the Tontine equally absorb said amount - the payments get higher as each member dies.

Yet, it got a bad rap because, yes, people would "kill" etc, or a Rich man would use nothing but his family.... yet with some very minor regulations in today's day and age -

It could work.

AND - Yes, it is illegal - yet you can still draw one up "legally" very similar...

and many retirement communities are talking about restarting this (Being in God's waiting room... aka Florida)

This could help the economy, imagine if Tontines took 1/3rd (Like they did in at the change of 19th century) made you portfolio.... The annuity payments would be huge if you had a 100 person Tontine - and if it's a 55+ plus community - imagine if they did something like this? After ten years... those 100 people, statistically - would be around 60 people... after ten yours you've made your money back, plus more now - and every-time someone dies... your payments get bigger and bigger.

This is actually a fun learn - C'mon GLP! Let's talk about money. I leave tomorrow.

You could hedge it with a good life policy - take the income from the tontine to pay for the life insurance.

Couldn't you just set up a Trust with a group of people and have it work the same way.

GE takes an insurance policy on every new employee- about 5-10K over the years. They have "an interest" in each person as an employee- they make the payments - they cash out

Here's the kicker.

They maintain the policy after that's employees leave- forever

It's termed "dead peasants" insurance and is a significant part of the corporate cash flow.

Written up in Wall Street journal in the 90's it was listed as 15%?!? Of entire returns.

They have hundreds of thousands of policies.

ALSO

Groups can get in on this - CHURCHES can get group policies and pay from the Sunday receipts. People sign for chirch to be beneficiary. They "pledge" to buy a ten ear policy and pay the costs.
Now - these policies can be MONETIZED- ie SOLD for Cash!!!
Secondary market for life insurance- yes they have MONETIZED DEATH!

We could do A GLP group policy

There are many ways to use insurance you won't hear of unless in a closed room...

A remainder trust us how estates do the same as OP describes.

I knew someone that was bequethed 1/16 of the benefit and was the last beneficiary - paying a certain amount and not to touch a proportion of the principal until the last piece was to go to a major university.
The estate department at Pittsburg National Bank invested this money and churned (illegal) the accounts to the tune of charging $1800 a MONTH and sucked dry the old folks retirement so they got less and less - from $125000 a year down to a few thousand. Then the trustees of the university came in and took the rest before the $3-6 Million was all gone. Relatives of mine counting on that money were left as paupers. PNB is too big to sue apparently.

So setting up this stuff requires controls on the Banksters that administrate

If I understand this, it would be advantageous to be in a group of investors that are older than myself? Add to that, other investors who are in poor health?

This would leave more funds for the survivors group of which I would be a member.

I presume there is no way of determining who you are investing with.

Its a crap shoot so to speak.

This is an interesting concept, I was not familiar with it until reading this thread.

Thank you for the enlightenment.

I like my odds.

I mean, I like this idea.

This is a great idea, actually.

Or, say, more GMO-consuming.
Or prescription drug-addicted.
Or living closer to a local mosque.

Yes...
Yes...

Hedging your bet?

My thoughts exactly... that's a whole 'nother level of morbidity.

Comedian would be one rich motherfucker.

Fascinating.

Let's just say statistics and I are old friends.

:grin: