A financial planner is advising a 65-year-old client who has significant assets in an RRSP, TFSA, and non-registered accounts. The client expresses concern about outliving their savings. Which of the following strategies directly addresses longevity risk?

Question: A financial planner is advising a 65-year-old client who has significant assets in an RRSP, TFSA, and non-registered accounts. The client expresses concern about outliving their savings. Which of the following strategies directly addresses longevity risk?

Answer options:

• Investing primarily in high-growth equity funds.
• Systematic withdrawals from the TFSA first. ✅ Purchasing a life annuity to cover essential expenses.
• Minimizing withdrawals from all accounts to preserve capital.

Correct answer: Purchasing a life annuity to cover essential expenses.

Explanation: Purchasing a life annuity provides a guaranteed income stream for the entirety of the annuitant's life, regardless of how long they live. This directly mitigates longevity risk, which is the risk of outliving one's financial resources.