Accordi ng to standard economic models, a risk-averse consumer who does not know how long he will live should place a high value on life annuities that provide guaranteed income for life. Yet numerous studies show that few consumers voluntarily annuitize their retirement savings. Rather than attempting to rationalize the lack of annuity demand, this paper explores the idea that aversion to annu...

OBJECTIVES The home is both older Americans' largest asset and their largest consumption good. This article employs new data on the consumption and assets of older Americans to investigate what role the home plays in the economic lives of older adults. METHODS We used 20 years of data from the Consumer Expenditure Survey to examine the asset and consumption trends of four cohorts of older Ame...

As of 2005, U.S. individuals had an estimated $7.4 trillion invested in IRAs and employersponsored retirement accounts. Many retirees will thus face the difficult problem of turning a pool of assets into a stream of retirement income. Purchasing an immediate annuity is a common recommendation for retirees trying to maximize retirement spending. The vast majority of retirees, however, are unwill...

Due to the increasing interest in several markets life annuity products with a guaranteed periodic benefit, back-side effects of some features that may prove be critical either for provider or customer should better understood. In this research, we focus on time frames defined by policy conditions annuities. While payment phase coincides post-retirement period traditional product, arrangements ...

We optimize the asset allocation, consumption and bequest decisions of an investor with uncertain lifetime and under time-varying investment opportunities. The asset menu is given by stocks, zero coupon bonds and pure endowments with different maturities. The latter are contingent on either a single or a joint life, and pay fixed or variable benefits. We further include transaction costs on sto...

We provide new empirical evidence on the importance of defined contribution pension wealth in England, and the nature of annuitization decisions taken by older adults who retire with such sources of wealth. Other things equal, financial literacy, and numeracy in particular, are important factors governing individuals' choices over whether to shop around for an annuity as opposed to taking the '...

Asset allocation during the retirement years has not received as much attention as allocation prior to retirement. Within the context of financial planning towards the end of the life-cycle, the economics literature is puzzled over the extremely low levels of voluntary annuitization exhibited amongst the elderly. This phenomenon is inconsistent with a strict interpretation of the Modigliani lif...