Archive: Karolos Arapakis

Finance.

Social Security helps Black individuals and those with low educational attainment – and therefore low earnings – through its progressive benefit structure.  On the other hand, the nature of Old-Age and Survivors Insurance (OASI) as a life annuity inherently increases expected lifetime benefits for individuals who tend to live longer.  Regardless of how these factors…

Finance, documents and senior couple on sofa with bills, paperwork and insurance checklist in home, life or asset management, Elderly black people on couch with financial, retirement or mortgage debt

Although many economic models predict high annuitization rates, only a small portion of retirees hold an annuity.  This discrepancy is known as the “annuity puzzle.”  Many explanations have been advanced for this puzzle, all of them promoting reasons why individuals might not want to annuitize. This brief, which is based on a recent paper, analyzes…