Bitcoin and the Retirement Savings Challenge

As populations live longer, a growing number of individuals face insufficient savings for a comfortable retirement. Bitcoin offers a partial solution by providing a form of savings that cannot be debased, helping to preserve value over the long term. A societal shift toward valuing future years more highly could further improve retirement readiness.

The Longevity Risk Problem

However, Bitcoin alone cannot solve all retirement challenges. A major obstacle remains: no one knows exactly how long they will live. Living “too long” can lead to running out of money in old age—a problem the pensions and insurance industry calls longevity risk.

Bitcoin-Based Solutions for Lifetime Income

In 2022, an article for Bitcoin Magazine proposed a Bitcoin-denominated annuity to allow retirees to pool longevity risk and receive a lifetime Bitcoin income. Building on this concept, a new product has emerged: the Bitcoin Tontine from Tontine Trust, which offers transparency, potentially higher income, and pooled longevity risk.

Understanding Tontines

A Tontine pays participants an income for life, with payouts adjusted based on the collective longevity of the group. Each member contributes to a segregated trust, and when a participant dies, their remaining funds are distributed to surviving members, boosting their retirement income. Payouts are calculated continuously based on life expectancy, current investment value, and expected returns, ensuring members never run out of income. Costs are covered by a flat annual trustee fee of 1%.

Differences Between Tontines and Annuities

Unlike annuities, which offer a fixed or pre-defined income and require insurers to hold substantial capital, Tontines are transparent, flexible, and allow participants to adjust investment strategies over time. Options include Bitcoin-focused funds, mixed asset strategies, and index or money market funds. The pooled mechanism and higher expected returns can result in greater lifetime income than traditional annuities, although payouts may fluctuate.

Addressing Risks and Fraud Prevention

A key risk in Tontines is ensuring members’ longevity is accurately verified. Tontine Trust combats this with a patented proof-of-life system via its app, while segregated accounts and blockchain-based proof-of-reserves enhance transparency and trust.

Historical Context and Modern Evolution

Tontines have a long and colorful history, often depicted in fiction as high-stakes arrangements with last-survivor rewards. Modern Tontines operate at scale, anonymously, and with regulatory safeguards. Previous restrictions in the U.S. were linked to specific insurance practices, not the fundamental concept of pooling longevity risk.

Regulatory Developments Supporting Tontines

Tontines function like pensions and trustee services, with fiduciaries managing funds in members’ best interests. Recent developments favor Tontine adoption. The OECD recommended that defined contribution plans protect against longevity risk through pooled arrangements or annuities. Additionally, an executive order signed by Donald Trump in August 2025 encourages access to alternative assets and longevity risk-sharing strategies, paving the way for Bitcoin-based Tontines.

Toward a Future of Secure Retirement Income

National Tontines backed by Bitcoin could represent a new form of social security, providing inflation-proof, lifetime income while reducing strain on pay-as-you-go state pension systems. Transitioning to a funded, pooled model offers intergenerational fairness and security at minimal cost to governments.