Archive: Guan Gong

Senior man calculating finances

Abstract Although annuities provide longevity insurance that should, in theory, be attractive to risk-averse households facing an uncertain lifespan, rates of voluntary annuitization remain extremely low.  We evaluate a proposed annuity product, the Advanced Life Deferred Annuity, an annuity purchased at retirement, providing an income commencing in advanced old age.  Using numerical optimization techniques, w…

A glass jar full of coins and plant growing through it with some coins and plant leaves.

Introduction Immediate annuities provide insurance against outliving one’s wealth.  Previous research has shown that this insurance ought to be valuable to risk-averse households facing an uncertain lifespan.  But rates of voluntary annuitization remain extremely low.  Many explanations have been offered for retired households’ reluctance to annuitize.  One prominent explanation is that annuities suffer from a…